Nepal's economy has shown signs of an upswing, despite an expanding Maoist revolt, Prime Minister Surya Bahadur Thapa said, although officials said the nation would not hit its six percent growth target.
"Though the economic progress we have achieved in the recent past is not fully satisfactory, there are some signs of positive results in the economy," Thapa told AFP in an interview.
Thapa's comments same as Nepal's economic planners said they were aiming for gross domestic product growth of 4.0 to 4.5 percent for the financial year ending mid-July.
Planners are expecting agricultural growth of 3.0 to 3.5 percent and non-agriculture growth of between 4.0 to 4.5 percent.
Inflation is targeted at around 5.0 percent for the tiny kingdom, wedged between Asian giants India and China.
"Our target in the annual planning was to achieve 6.0 percent growth during the current fiscal year," Shankher Nath Sharma, vice chairman of the National Planning Commission, said in an interview.
But he said security problems caused by the Maoist revolt that has so far killed more than 9,000 people have hit investments and growth has been constrained.
The guerrillas, who in the past have confined their attacks mainly to rural regions, have lately started targeting agricultural and businesses centers on the kingdom's southern plains.
The revolt has paralysed Nepal's economy, scaring off investors while forcing the government to redirect much-needed development funds to fighting the rebels.
"The insurgency has caused about 6.2 billion rupees' (83.7 million dollars) damage to infrastructure," Sharma said.
India, fearful of the revolt spreading to its own insurgency-wracked north-east, the United States and Britain have been helping equip Nepal's army.
But little so far has been done to address the chronic poverty that triggered the revolt in the kingdom, where some 40 percent of the population earns less than one dollar a day.
However, one bright spot was a 44 percent jump in the number of tourist arrivals in February over the same month the previous year, officials said. The Maoists have been fighting to topple the monarchy and install a communist republic since 1996 in a conflict that has claimed over 9,000 lives.