The Asian Development Bank (ADB) has shared an optimistic outlook for Nepal’s economy, forecasting a growth rate of 4.4% in the current fiscal year (2081/82), up from 3.9% in 2080/81. This momentum is expected to strengthen further, with growth projected to reach 5.1% in 2082/83. The rebound is fueled by recovery in critical sectors such as energy, industry, and tourism, alongside improved credit flow and policy reforms.
Key Drivers of Growth
- Energy Sector Boost:
Nepal is set to add 900 megawatts of electricity this year, addressing long-standing power shortages and supporting industrial growth. - Construction & Industry:
Credit to the construction sector surged by 7.7% in the first half of 2081/82, signaling renewed infrastructure and industrial activity. - Tourism Revival:
Rising tourist arrivals and a rebound in trade and transport are revitalizing the services sector, contributing significantly to GDP. - Legal Reforms:
Recent policy changes have created a friendlier environment for investment, encouraging private-sector participation.
Global Challenges & Regional Resilience
While global uncertainties, such as U.S. policy shifts and China-U.S. trade tensions, are slowing growth in the Asia-Pacific region (down to 4.9%), South Asia remains resilient. The ADB expects regional growth to rise to 6%, driven by strong performances from countries like Nepal and India.
- U.S. Growth Decline: U.S. GDP growth is projected to drop from 2.8% (2023) to 2% (2024) and 1.9% in 2025.
- Impact on China: Trade disputes could further dampen China’s economy, affecting global supply chains.
Inflation & Economic Stability
Nepal’s inflation is expected to stay manageable at 5.2% in 2081, easing to 5% in 2082. Improved supply chains and prudent fiscal policies are helping stabilize prices.
Key Data Snapshot
Looking Ahead
Despite global headwinds, Nepal’s focus on energy expansion, tourism revival, and policy reforms positions it for steady growth. The ADB’s report highlights the importance of sustaining reforms to attract investment and boost productivity. With inflation under control and key sectors thriving, Nepal’s economic future appears promising.