Madhesh GDP growth estimated at 1.31% in 2025/26: NRB

KATHMANDU: Madhesh Province’s economy is estimated to grow by just 1.31% in the fiscal year 2025/26, significantly below the national economic growth projection of 3.85%, according to a Nepal Rastra Bank (NRB) report.

The province’s gross domestic product (GDP) is estimated at Rs 863.33 billion in the review year, accounting for a relatively modest share of the national economy, the central bank said in its annual study of economic activities in the province.

The agriculture, forestry and fisheries sector is expected to contribute the largest share of Madhesh’s GDP at 34.97%, while mining and quarrying sector is projected to make the smallest contribution, at 0.14%.

The province’s per capita GDP is estimated at $934.

Agricultural performance in Madhesh was mixed during the review period. The area under fruit cultivation increased by 33.99%, while the area under spice crops expanded by 4.46%. The area under food and other crops grew by 4.47%.

However, the area under vegetable cultivation and horticulture declined by 10.15%.

In terms of production, fruit output increased by 4.99%, and vegetable and horticulture production edged up by 0.54%. Production of food and other crops declined by 5.69%, while spice production fell by 4.44%.

Livestock production also showed mixed trends. Meat and egg production increased by 10.19% and 3.11%, respectively, while milk production declined by 2.67%. Fish production grew by 5.05%.

Forest-based production recorded substantial growth, with timber production increasing by 60.58% and firewood production rising by 78.62%.

As of mid-July 2026, banks and financial institutions had extended Rs 59.86 billion in loans to the agriculture, fisheries and forestry sectors in Madhesh. This accounts for 12.10% of their total lending in the province.

The average capacity utilization of major industries covered by the NRB study stood at 64.59% during MAD2025/26.

Bank lending to the industrial sector increased by 0.68% during the review period, reaching Rs 128.97 billion, compared with Rs 128.09 billion in the previous fiscal year.

A total of 116,207 land and property transactions were registered in Madhesh during 2025/26. Such registration generated Rs 3.22 billion revenue for the government.

By mid-July 2026, deposits mobilized by banks and financial institutions in the province had increased by 17.32% to Rs 478.37 billion. However, credit disbursement declined by 0.18% to Rs 494.95 billion.

A total of 179.041 people from the province obtained labor approvals for foreign employment in 2025/26. This accounted for 22.60% of all labor approvals issued in Nepal during the fiscal year.