Nepal’s economic growth rate has been estimated at 5.1% in the second quarter of the current fiscal year 2081/82 BS (2024/25 AD), according to the National Statistical Office. Despite improvements in key sectors such as transportation, construction, and agriculture, the growth rate remains moderate due to sluggish progress in education, housing, and other service sectors.
GDP Growth and Weather Impact Adjustments
The National Statistical Office released the preliminary Gross Domestic Product (GDP) forecast on Wednesday, highlighting that the economy has shown a slight expansion. However, when adjusted for weather-related impacts, the actual growth rate is 2.2%.
“Improvement in transportation, construction, agriculture, electricity generation, and financial intermediation contributed positively to the economic growth,” the office stated in its report.
Sector-Wise Economic Performance
Sectors with Positive Growth
- Transportation and Storage: The highest growth rate of 14.2% was recorded in this sector, driven by increased mobility and infrastructure expansion.
- Mining and Quarrying: With a 9.5% growth rate, this sector was the second-fastest-growing industry.
- Construction: A 9.1% growth was fueled by the rise in imports of construction materials and increased domestic production.
- Manufacturing: The manufacturing sector expanded by 7.4%, boosting financial and insurance sectors, which grew by 6.6%.
- Trade and Information Technology: These sectors saw moderate growth of 6.1% and 4.9%, respectively.
- Agriculture: Contributing significantly to Nepal’s GDP, agriculture grew at 3.2%, supported by increased production of rice, vegetables, ginger, winter fruits, and livestock products.
Sectors with Negative Growth
Not all sectors performed well during this quarter. Two out of 18 industrial sectors faced contraction:
- Electricity and Gas: A negative growth of 4.8% was recorded in this sector.
- Housing and Food Services: This sector declined by 2.7%, primarily due to reduced investment and lower consumer demand.
Challenges and Future Outlook
While Nepal’s economy has shown resilience, challenges persist. The education, housing, and food service sectors continue to lag behind, pulling down overall economic momentum. Experts suggest that policies focusing on boosting these sectors could further strengthen the country’s economic outlook.
Economic analysts believe that investment in infrastructure, increased agricultural output, and policy reforms could enhance Nepal’s growth trajectory. However, external factors such as climate change, global economic fluctuations, and trade policies could impact future growth trends.
