Oct 312013
 

Nepal is characterized by economic slowdown and inflationary outlook; the year 2009 would not be faring well for the global economy. It is projected that the global output will contract by 1.2 percentage point in 2008. The global slowdown is attributed to the impacts of the sub-prime mortgage crisis-triggered financial turbulence in the USA and the trade and financial spill-over in the other advanced economies, rising inflationary expectations in association with the oil price escalation, and existing structural problems of the global economy.

The world output growth in 2007 was 4.9 percent, with the advanced economies rising by 2.7 percent and the emerging and developing economies recording a growth of 7.9 percent. The world output growth in 2008 is projected at 3.7 percent, with the growth rates of the advanced economies at 1.3 percent and that of the emerging and developing economies at 6.7 percent. Consumer prices that rose by 2.2 percent in the advanced economies and 6.4 percent in the emerging and developing economies in 2007 are projected to rise by 2.6 percent in the former and 7.4 percent in the latter in 2008.

Nepal’s neighbours, China and India grew respectively by 11.4 percent and 9.2 percent in 2007 and are projected to record respective growth rates of 9.3 percent and 7.9 percent in 2008. South Asia, which attained a growth rate of 8.6 percent in 2007, is expected to rise by 7.5 percent in 2008. Nepal registered noticeable acceleration in the economic growth rate during FY 2007/08. GDP at the basic prices expanded by 5.56 percent, the highest during the last seven years. Favorable monsoon and good policy impact contributed to raise the growth rates both in agriculture and the non-agriculture, which expanded by 5.65 percent and 5.57 percent respectively, compared to the previous year’s growth estimates of 0.9 percent and 4.1 percent respectively.

The sectors in the non-agriculture that witnessed growth higher in FY 2007/08 over that in FY 2006/07 have been the financial intermediation (13.8 percent against 11.4 percent), hotels and restaurants (7.6 percent against 3.5 percent), health and social work (7.4 percent against 6.7 percent), fishing (7.1 percent against 3.0 percent), transport, storage and communications (6.6 percent against 4.5 percent), wholesale and retail trade (6.4 percent against minus 4.5 percent), public administration and defense (5.7 percent against 1.4 percent), construction (3.1 percent against 2.5 percent), and mining and quarrying (2.8 percent against 1.5 percent).

The sectors that experienced growth lower in FY 2007/08 over that in FY 2006/07 have been the other community, social and individual services (11.1 percent against 11.8 percent), education (4.6 percent against 6.2 percent), real estate, renting and business’ services (4.4 percent against 11.8 percent), electricity, gas and water (3.4 percent against 13.0 percent), and manufacturing (0.2 percent against 2.6 percent). Regarding the share components of the major sectors in the GDP at current prices in FY 2007/08, the agriculture occupied 32.1 percent followed by wholesale and retail trade at 13.6 percent, real estate, renting and business services at 9.9 percent, transport, storage and communications at 9.3 percent, manufacturing at 7.1  percent, construction at 6.4 percent, education at 6.0 percent, financial intermediation at 4.8 percent, electricity, gas and water at 2.0 percent, public administration and defense at 1.9 percent, and hotels and restaurants as well as the health and social work at 1.4 percent each.

The significance of the tertiary sector in the economy has been rising in accordance with the evolving nature of the economic development process. The tertiary sector, which rose by 4.2 percent in FY 2006/07, is estimated to have risen by 6.9 percent in FY 2007/08. Its share in the GDP in FY 2007/08 reached 5            1.4 percent, a 0.5 percentage point rise from the 50.9 percent level of FY 2006/07. The primarys ector also posted a respectable growth of 5.6 percent in FY 2007/08 in comparison to the 1.0 percent growth in FY 2006/07, with its share in the GDP rising marginally to 33.1 percent from 33.0 percent in FY 2006/07. The growth rate of the secondary sector, however, slowed to 1.8 percent in FY 2007/08 in comparison to the 4.0 percent rise in FY 2006/07, as refelcted in its reduced share in GDP, from 16.1 percent in FY 2006/07 to 15.5 percent in FY 2007/08.

As ratios of GDP, the gross domestic saving rose from 9.7 percent in FY 2006/07 to 11.5 percent in FY 2007/08 while the gross national saving reached 32.0 eprcent in FY 2007/08 from 28.5 percent in FY 2006/07. Gross capital formation as percent of GDP accelerated to 32.0 percent in FY 2007/08 from 28.0 percent in FY 2006/07. Hence, the surplus of gross national saving over gross capital formation as a ration of GDP declined from 0.5 percent in FY 2006/07 to almost nil in FY 2007/08.

As percent of GDP, the rise in the gross capital formation by 4.0 percentage points and the gross national saving by 3.5 percent points between FY 2006/07 and FY 2007/08 characterizes rising investment level in the economy as supported by equally rising level of the national saving. Accelerating the faster pace of revenue growth has remained the major feature of the economy in FY 2007/08. Revenue mobilization, that picked up in FY 2006/07 by posting a growth of 21.3 percent and pushing the revenue/GDP ratio to 12.1, scaled a growth of 26.8 percent during the first eight months of the current fiscal year in comparison to the growth of 17.8 percent registered during the same period in FY 2006/07. The fiscal deficit remains under control, though its ration in terms of GDP rose to 4.1 percent in FY 2006/07 from a ration of 3.8 percent in FY 2006/07. The treasury position of the government shows a balanced position as there were cash surpluses of Rs. 3.12 billion in mid-July 2007 and Rs. 4.34 billion in mid-March 2008 in comparison to the overdraft of Rs. 1.07 billion in mid-July 2006.

As a ration of GDP, the government’s total outstanding debt (domestic and external) came down from 50.3 percent (domestic 14.5 percent and external 35.8 percent) in mid-July 2006 to 44.1 percent (domestic 14.3 percent and external 29.8 percent) in mid-July 2007. This ration further fell to 39.5 percent (domestic 13.1 percent and external 26.4 percent) in mid-March 2008. The Government of Nepal’s share capital in 36 public enterprises as at the end of FY 2006/07 amounted to Rs. 75.8 billion though the net worth was reduced to Rs. 39 billion. Some public enterprises still need to update their audits. There is also the need for reconciling the records between the government and the public enterprises with respect to the amounts of the former’s share and loan investments in the latter. The consumer prices on the annual point-wise basis rose by 5.1 percent in mid-July 2007 and by 7.2 percent in mid-March 2008. Such rise in the wholesale price index was 8.5 percent in mid-July 2007 and 6.6 percent in mid-March 2008. The GDP deflator, which increased by 7.4 percent in FY 2006/07, is estimated to have decreased by 7.7 percent in FY 2007/08.

Deposits in the banking sector during the first eight months of the current fiscal year rose by 13.3 percent. Deposits during the equivalent period in the previous year had gone up by 12.8 percent. Deposits as percent of GDP in mid-March 2008 reached 43.1 percent, up from 41.8 percent in mid-March 2007. The share of outstanding private sector credit in the total banking sector took an upturn, from 76.9 percent in mid-March 2007 to 78.4 percent in mid-March 2008. As percent of GDP, narrow money increased to 17.2 percent in mid-March 2008 from 16.4 percent in mid-March 2007. This ratio for the broad money reached 54.7 percent in mid-March 2008 from 53.1 percent in mid-March 2007.

So, as percentage points of the GDP, the narrow money and broad money in mid-March 2008 as compared to that in mid-March 2007 increased by 0.8 and 1.6 percent respectively, reflecting progress in financial intermediation. Exports, which had increased by 0.9 percent during FY 2006/07 declined by 2.6 percent during the first eight months of FY 2007/08 over the similar period in the previous year. Imports, which had risen by 10.3 percent during FY 2006/07, accelerated by 23.6 percent during the first eight months of FY 2007/08 over the similar period in the previous year.

Remittance inflows, which had amounted to Rs. 1.14 billion during FY 2006/07, rose by 28.1 percent to Rs. 82.42 billion during the first eight months of FY 2007/08 over the similar period in the previous year. The balance of payments witnessed a surplus of Rs. 13.27 billion during the first eight months of FY 2007/08 in comparison to the surplus of Rs. 5.90 billion during FY 2006/07. Consequently, total foreign exchange reserve increased by 10.2 percent, from Rs. 165.13 billion in mid-July 2007 to Rs. 181.98 billion in mid-March 2008 ($ 2.82 billion). At the prevailing imports trend, this reserve level would be sufficient to finance merchandise imports for 11.3 months and merchandise and services imports for 8.9 months

The number of tourists during the calendar year 2007 increased by 33.5 percent to 526,000. During the calendar year 2006, the number of tourists had increased by 4.9 percent to 393,950. Travel receipts during FY 2006/07 had amounted to Rs. 10.12 billion. Such receipts during the first eight months of the current fiscal year as compared to the corresponding period in the previous year increased by 7.6 percent to Rs. 10.89 billion. On the road transport sector, the total network of the blacktopped, graveled and fair-weather roads till mid-March 2008 reached 17,982 km. The length of the roads till mid-March 2007 was 17.782 km. The number of hospitals increased from 87 in mid-March 2007 to 94 in mid-March 2008. Among the skilled personnel in the health sector, the number of doctor increased from 1,361 in mid-March 2007 to 1,457 in mid-March 2008.

The number of primary, lower secondary and secondary schools in the government and the private sectors during the academic session 2007/08 reached 44,853. During this session, the number of students was 6,533,410 and that of the teachers was 165,423. OF the total number of the schools, the share components of the primary lower secondary and secondary schools were 65.2 percent, 21.7 percent and 13.1 percent respectively. Of that total number of students, the share components of the primary lower secondary and secondary students were 67.6 percent, 22.1 percent and 10.3 percent respectively. Of the total number of the teachers, the share components of the primary lower secondary and secondary teachers were 70.6 percent, 16.9 percent and 12.5 percent respectively. Among the 165,423 teachers, 64.5 percent are trained, with the respective percentages of the trained teachers in the primary, lower secondary and secondary levels remaining at 66.4 percent, 52.3 percent and 70.0 percent.

Oct 302013
 


Let us consider a ferromagnetic material which is subjected to magnetizing field (H). The intensity of the magnetizing field (H) is gradually increased from 0. Then, the magnetic induction (B) also increases and becomes maximum (at point L in the graph). This state is called magnetic saturation.

On decreasing the value of magnetizing field (H), the magnetic induction (B) also decreases but the path that it follows is not the same. When magnetic hysteresismagnetizing field (H) becomes 0, magnetic induction (B) doesn’t come down to 0 (the material is still magnetized). The value of magnetic induction (B) at which the magnetizing field (H) is equal to 0 is called retentivity or remanence of the material.

On decreasing magnetizing field (H) further from 0 (applying magnetizing field in opposite direction), magnetic induction (B) in the material decreases further and it becomes 0 (demagnetized) at certain value of magnetizing field (H). This value is called coercivity of the material.

On further decrement in the value of magnetizing field (H), the magnetization of the material is reversed and it saturates in the opposite direction (at point E in the graph).

Similarly, if the value of magnetizing field (H) is reduced to 0, the retentivity field appears in the material at point F. Again, on reversing the direction of the field, the material is completely demagnetized at point G (coercivity field). Then the material is again magnetized in positive direction and it once again gets saturated. This completes the cycle of alternating magnetization of the material and the curve repeats in other cycle.

In the process of alternating magnetization of the magnetic material, it is seen that magnetic induction (B) lags behind magnetizing field (H). This phenomenon in which the magnetic induction (B) lags behind magnetizing field (H) is called magnetic hysteresis. The B-H curve for one complete cycle is called hysteresis loop of the material. The area covered by the hysteresis loop represents the loss of energy within the material when it is magnetized and demagnetized. The loss of energy is called hysteresis loss and it is in the form of heat energy.