Nepal's economy wil grow by 4.9 percent this fiscal, ADB projects

KATHMANDU, SEPTEMBER 26 : The Asian Development Bank (ADB) has projected Nepal's economic growth for the current fiscal (2024/25) to be 4.9 percent, an increase from the 3.9 percent estimated for the last fiscal year (2023/24).

This growth will be butressed by increased electricity production, which can boost industrial growth, according to a flagship report ‘Asian Development Outlook" unveiled by the ADB yesterday.   Additionally, a rise in tourist arrivals is anticipated to enhance sectors such as accommodation and food services. In agriculture, the timely completion of rice planting, combined with a normal monsoon, is expected to contribute to economic growth.

The report also forecasts that the current account deficit could reach 1 percent of Gross Domestic Product (GDP) in the current fiscal. This follows a 3.9 percent surplus in the last fiscal, which was driven by factors like moderate improvements in remittance inflows.

The ADB further suggests that Nepal Rastra Bank’s (NRB) goal of keeping inflation within 5 percent for the fiscal year 2081/82 is achievable. It notes that with a stable crop yield and a slight decline in inflation in India, Nepal’s main source of imports, inflation may remain within the central bank's target range.