Nepal’s Economy Projected to Grow by 3.4 Percent in Q1
January 8, 2025 | Investopaper
Nepal’s economy is projected to grow by approximately 3.4 percent in the first quarter of the fiscal year 2081/82, as stated by National Statistics Office. This growth is attributed to increases in agricultural production, electricity generation and distribution, tourism arrivals, and hotel services. Additionally, improvements in transportation, health services, and public administration have contributed positively to the overall economy.
Despite these gains, the construction sector remains in contraction, and the growth in wholesale and retail trade is modest at 0.5 percent. The industrial sector shows mixed results, with 17 out of 18 sectors experiencing growth, while one sector experienced negative growth. The electricity and gas sector saw the highest growth rate at 21.4 percent, followed by transportation and storage at 6.7 percent.
The government has set a target of achieving a 6 percent economic growth rate for the current fiscal year. However, various international organizations have projected lower growth rates. For instance, the World Bank forecasts a growth rate of 5.1 percent for this fiscal year. The Asian Development Bank also projects a growth rate of 4.9 percent for FY2025.
Challenges remain, particularly in sectors like construction and manufacturing, where growth is not satisfactory. External factors such as geopolitical tensions and global economic downturns could also impact Nepal’s economic performance. Despite these challenges, the economy is expected to continue its gradual recovery, driven by domestic demand and infrastructure spending.
