Economic Analysis - Development Of Tourism Presents Upside Growth Risks - JAN 2018


BMI View: The Nepali government ' s efforts to develop the tourism sector appear to be paying off, with tourist arrivals on a gradual recovery following the sharp drop in the wake of the country's devastating earthquakes and aftershocks in 2015. We expect the government to persist with its tourism initiatives and believe that the sector could serve as an alternative source of growth, placing upside risks to our medium-term forecast for real GDP growth to average 2.4% annually over the next five years.

Tourist arrivals into Nepal have been on a gradual uptrend, reflecting the improving sentiment towards the country, which saw a considerable amount of its tourist infrastructure destroyed in the devastating earthquakes and aftershocks in 2015. We believe that this reflects the effectiveness of the government's various initiatives, including stronger bilateral ties with India and China, an increased presence on social media, and increased air transport links with the rest of the world, and expect this trend to continue. We expect the government to persist with its tourism development initiatives as the tourism sector has considerable potential, posing upside risks to our medium-term forecast for Nepal's real GDP to average 2.4% per annum over the next five years.

Improving Tourist Figures Hint At Possible Recovery

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