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Quake-hit Nepal Cuts Growth Outlook to Lowest in 14 Years

FILE - A Nepalese woman looks at the reconstruction work at the Boudhanath Stupa which was damaged in last year's earthquake in Kathmandu, Nepal, Monday, April 25, 2016.

Earthquake-stricken Nepal cut its economic growth forecast on Tuesday for the fiscal year that ends in mid-July to the lowest in 14 years, saying persistent fuel shortages after a blockade of its border with India have hampered economic activity.

The government's Central Bureau of Statistics (CBI) said the economy would grow by 0.77 percent in the year to July 15, the lowest since 2001/02, because of the border disruptions.

This compares with a forecast of around 2 percent growth made in December, after last year's earthquake that killed 9,000 people and destroyed about one million homes, roads and other infrastructure. In 2014/15, the economy grew by 2.32 percent.

Last September the landlocked nation's ethnic Madhesi community blocked imports of essential supplies such as fuel to protest against Nepal's first republican constitution, which they said had failed to meet their expectations for a greater say in the running of the government.

The ethnic Madhesi community is dominant in Nepal's southern plains that border India.

Even though the border blockade ended in February, fuel supplies have not yet returned to normal.

"The low growth projection is because of the adverse impact of the blockade on all sectors of the economy like trade, transportation, tourism and industries," senior CBI official Ishwari Prasad Bhandari told Reuters.

Nepal received $4.1 billion in pledges from donors for reconstruction after the quake. Opposition political parties have criticized Nepal's ruling coalition for being slow on rebuilding and failing to manage the fuel supplies.