Everest Day in Nepal is traditionally a time of celebration, but this year the party has been spoiled by a 70% fall in tourism.

Mountaineers, trekkers and holiday makers to the Himalayas have been Nepal's main foreign currency earner, bringing in about a half million visitors and $160m every year.

To encourage the foreign trekkers and mountaineers, the Nepalese government has opened 103 new mountains of different heights

Vinaya Shakya Nepalese Mountaineering Association

But the massacre of Nepal's royal family in the palace last June and an escalation of the civil war with Maoist revolutionaries has scared foreigners way.

In the latest clashes on Tuesday, Nepali security forces killed 152 Maoists, state television reported, adding to the civil war's 2,000 death toll over the past six months.

But Nepal hopes a year-long celebration of Everest Day, leading up to the 50th anniversary next year, will bring the tourists back.

Mounting tourism

Tourism became Nepal's biggest industry after the country opened its borders to foreigners on 29 May 1953 and Sir Edmund Hillary's scaled the world's highest peak three years later.

"To encourage the foreign trekkers and mountaineers, the Nepalese government has opened 103 new mountains of different heights including several virgin peaks," said chief administrator of the Nepalese Mountaineering Association, Vinaya Shakya.

Nepal has officially listed a total of 263 mountains, including eight peaks over 8,000 metres tall for mountaineering.

The tourist industry employs about 200,000 people in a country where the World Bank says 40% of its 23 million population lives in poverty.

Sherpas, who once lived in poor conditions raising yaks and trading salt, have prospered as mountain guides and porters.

Tourism has also promoted development, with small hotels and restaurants dotting the route to popular mountains.

The Maoist rebels, who encourage tourists to visit their camps, say the constitutional monarchy must be overthrown for poverty to be further reduced.

Economic woes

The fall in tourist numbers is just one of the economic problems afflicting Nepal.

Last week, its central bank, Nepal Rastra Bank (NRB), said the conflict with the Maoists had forced up government spending and prompted foreign trade to plummet.

Foreign exports in the last quarter fell by 10.5%, despite strong growth in demand from India, its main trading partner.

The exports decline was mainly due to a 39% plunge in demand for the country's leading products - ready-made garments and woollen carpets.

At the same time, the government has pumped more money into the war effort, leaving less cash for development.

Tax revenues grew by 4.5% to 34.07bn rupees in the last nine months, compared with an increase of 17.7% in the previous financial year.

This has been blamed on the fall in tourism and a weak economy, the NRB said.

Meanwhile, Nepal's rate of inflation has risen by 2.4% over the nine months to April.