September 22 , 2022 | Investopaper
The economic growth rate of Nepal will decline to 4.7 percent in the coming year. The ‘Asian Development Outlook-2022’ report released by Asian Development Bank (ADB) on Wednesday predicted that Nepal’s gross domestic product (GDP) growth rate would be 5.8 percent in 2022 and 4.7 percent next year.
“The GDP growth rate will decrease next year due to the tight monetary policy of Nepal, increasing imports and decreasing foreign exchange reserves,” the ADB report said. “Due to measures taken by various agencies to reduce imports, there may be negative risks to achieving the target economic growth rate as domestic consumption decreases and consumption is discouraged,” said ADB Country Director Arnaud Cauchois.
The growth rate of the agricultural sector will increase due to the improved monsoon. But sectors like service, real estate, wholesale and retail trade will be affected.
ADB has estimated that the inflation rate of Nepal may decrease. “It is seen that the inflation rate of Nepal may reach 6.3 percent in 2022, but it may decrease to 6.1 percent in 2023,” said the report.
The government has set a target of achieving economic growth rate of 8 percent for the current fiscal year and limit the inflation rate to below 7.5 percent.