Nepal economy hit by insurgency

The Nepalese Central Bank has said that the country's economy has slowed down sharply this year due to the continuing Maoist insurgency and the government's efforts to contain it.

The bank said that industrial production, tourism and trade have sharply declined.

The report comes ahead of a new fiscal budget which is due to be announced early next month.

A correspondent for the BBC in Kathmandu says that the insurgency has badly affected industrial production, and exports have fallen.

Many development projects have been abandoned because of lack of funds and concerns about security.

A state of emergency has been in force in Nepal since November last year as government forces continue their campaign against the insurgents.

From the newsroom of the BBC World Service

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