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Nepalese economy, hit hard by last year's deadly earthquake, is struggling to revive as the government's spending in reconstruction and other development activities has remained poor.
Economic activities from the private sector has remained sluggish firstly due to halting of export and imports during the blockade and slowed reconstruction drive creating less demands than expected.
The continued double-digit inflation since last few months also didn't help.
Nepal's government and international institutions such as the World Bank, Asian Development Bank and International Monetary Fund have projected economy to grow in the range of 0.5 percent to 2 percent this fiscal year which ends in mid-July.
Nepal had targeted to achieve a 6-percent growth this fiscal year on the backing of the post-quake reconstruction.
Due to massive damages caused to housing and other infrastructure, they were expected to create aggregate demands in the market boosting the economic activities.
However, delay in formation of reconstruction authority, four and half month long supply disruptions in southern border crossings causing slumps in economic activities hit hard growth potential of Nepalese economy.
"The reconstruction could have been growth driver for Nepalese economy for the next two years but delayed in starting the process limited its impact on economic growth," said senior economist Shankar Sharma.
It took eight months just to form the National Reconstruction Authority (NRA), an agency to drive the reconstruction activities in a faster pace.
It has just started to distribute first installment of promised grant from the government to rebuild houses affected by the quake.
Of 693 million U.S. dollar allocated for the authority, only 103 million U.S. dollar has been released for reconstruction of public infrastructure and grant to the people affected by quake to rebuild their houses so far, according to the NRA.
