Economic Environment (Economic Conditions)

Economic conditions indicate the health of the economy in which the projects operate. The factors of economic conditions are:

1. Income: The level and distribution of income affect expenditure, saving and investment. They together influence the economic conditions of projects. Nepal has a per capita income of US $ 280. The GDP growth rate is very low.
2. Business Cycles: The stages of business cycle can be prosperity, recession and recovery. They affect the health of projects.
3. Inflation: It is rise in price level. It influences costs, price and profits of projects.
4. Regional Economic Groups: They promote cooperation among member countries for projects. They provide opportunities to member countries and threats to non-member countries.

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