Economic Growth Rate Projected at 3.4% for the First Quarter of FY 2081/82: National Statistics Office

The National Statistics Office has projected Nepal’s economic growth rate for the first quarter of the current fiscal year 2081/82 at 3.4%. According to the report published on Tuesday, the economy is expected to achieve modest positive growth compared to the same period of the previous fiscal year. While agriculture, tourism, and electricity production have contributed positively, weak performance in construction and trade has limited overall growth.

The agriculture, forestry, and fisheries sector, which holds the largest share of Nepal’s economy, is projected to grow by 3%. This growth is attributed to increased production of rice, vegetables, cash crops, and livestock products.
Hemraj Regmi, Deputy Chief Statistics Officer and spokesperson for the National Statistics Office, said, "Timely availability of fertilizers, the use of improved seeds, and adequate monsoon rainfall have boosted agricultural production. However, floods and landslides have prevented significant growth in the sector."

The electricity and gas sector has recorded the highest growth at 21.4%, providing a strong boost to the overall positive economic trend. Similarly, the transportation and warehousing sector grew by 6.7%, while the accommodation and food service sector achieved 6.3% growth. Health services, public administration, and education sectors have also shown positive growth.

The construction sector has struggled in the first quarter, with a negative growth rate of -0.6%, attributed to a decline in the import of construction materials. Similarly, wholesale and retail trade has seen minimal growth of 0.5%, reflecting limited domestic production of agricultural goods and a slowdown in the import of key trade items.
"While there was a slight increase in agricultural production and imports, it wasn’t enough to drive significant growth in the trade sector," said Regmi.

The industrial goods manufacturing sector showed positive growth of 2.3%, indicating gradual recovery compared to the first quarter of the previous fiscal year. Other service-related activities, such as education (0.4%), health (4.1%), and real estate (3.1%), have also registered modest growth.

Compared to the fourth quarter of FY 2080/81 (Baishakh to Ashadh), economic growth in the first quarter of this fiscal year (Shrawan to Ashoj) is projected to remain at just 0.2%. Of the 18 industrial sectors, 12 sectors reported growth, while six experienced negative growth.
Sectors with negative growth include mining and quarrying (-13.9%), trade (-3.7%), agriculture (-0.8%), construction (-0.6%), water supply and waste management (-0.3%), and manufacturing (-0.2%).

The government has set a target of 6% economic growth for the current fiscal year. However, the weak performance in construction, trade, and manufacturing sectors poses a significant challenge to achieving this goal. The World Bank has projected Nepal's economic growth rate to reach 5.1% this year.

the first quarter of FY 2081/82 presents mixed signals for Nepal’s economy. While positive contributions from agriculture, tourism, and electricity production are encouraging, weak performance in construction, trade, and industrial production highlights the need for focused improvements. Experts have emphasized that without addressing these lagging sectors, achieving the government’s ambitious growth target will be difficult. The report indicates that while the economy is on a recovery path, further efforts are required to ensure stability and long-term growth.