The overall economic growth rate in Nepal's current fiscal year, will be 1.8 percent, according to preliminary estimates, state-run Radio Nepal reported Saturday.

Nepal Rastra Bank, the central bank of the country, stated that the economic growth rate will not be high due to the negative impact of the long spells of droughts, the decrease in government 's capital expenses, the impact on poultry industry due to the suspected "bird flu" and the decline in power supply.

Governor of the bank Bijaya Nath Bhattarai was quoted by the radio as saying that the recent positive developments in the country will help decrease the recession in the economy.

"The analysis of recent evolving positive developments in the country suggest that the Nepalese economy is expected to take a turnaround in the new fiscal year from the path of decelerating economic growth," he said.

Addressing the 51st anniversary of the bank held here Friday, the governor said that under the changed circumstances, the Nepalese economy is expected to benefit from the higher world output growth.

"In addition, domestic as well as foreign investors' confidence is expected to increase," Bhattarai said.

Likewise, consumer confidence fueled by increased private sector remittances is expected to increase, he added.

Bhattarai also noted that the past one-year remained " economically excruciating" period for Nepal. The intensification of the decade long armed conflict, increased political instability and adverse weather conditions hit the economy hard.

The Gross Domestic Product, according to Bhattarai, grew by only 2.3 percent in 2004/2005, the lowest in the last ten years except a negative growth in 2001/2002.

He said that it was likely to fall further to 1.8 percent in the current fiscal year, which will end on July 15, 2006.

Source: Xinhua