Himal Press 
Source: National Statistics Office
KATHMANDU: The economy expanded by 4.05% year-on-year in the second quarter of the fiscal year 2025/26, as per the preliminary estimates released by the National Statistics Office (NSO) on Monday.
The growth estimate based on seasonally unadjusted gross domestic product (GDP) at basic prices reflects improved performance across a broad range of sectors compared to the same period of the previous fiscal year.
According to the NSO, the expansion was primarily driven by gains in electricity generation and distribution, deposit mobilization and credit flow, life insurance premium collection, livestock production, fruits and vegetables, trade services, and tourist arrivals, among other activities.
All 18 economic activities recorded positive growth during the review period. However, the overall pace of expansion remained moderate due to declines in construction material imports, paddy production, and reduced domestic output of some goods.
However, quarter-on-quarter growth estimates based on seasonally adjusted prices stand at only 2.04%. Out of the 18 economic activity sectors, 16 posted growth while two experienced slight contraction.
Among major sectors, electricity and gas activities recorded the highest growth at 22.74%, followed by financial and insurance activities (12.51%), transport and storage (9.65%), accommodation and food services (5.18%), and wholesale and retail trade (4.11%).
Agriculture, the largest contributor to the economy, grew by an estimated 2.21% year-on-year. Despite a decline in paddy output, increases in cash crops, vegetables, fruits, and forestry products supported overall agricultural value addition, according to NSO.
Similarly, wholesale and retail trade, the second-largest sector, expanded by 4.11% due to higher domestic production and imports of tradable goods. In contrast, sectors such as water supply, sewerage and waste management (0.55%), public administration and defence (1.11%), and education (1.16%) posted relatively weak growth.
Quarterly comparison
Compared to the first quarter, the second quarter saw positive growth in 16 out of 18 sectors. Agriculture, forestry, and fisheries grew by 2.48%, while wholesale and retail trade expanded by 0.99%.
Transport and storage recorded the highest quarter-on-quarter growth at 6.20%, followed by human health and social work (3.98%) and financial and insurance activities (3.82%).
