World Bank forecasts 3.3% economic growth for current fiscal year

Himal Press 02 Apr 2024
World Bank forecasts 3.3% economic growth for current fiscal year

KATHMANDU: The World Bank has projected Nepal’s economy to grow by 3.3% in the current fiscal year, driven by revived tourism and a pickup in hydropower exports.

According to the latest Nepal Development Update published by the multilateral donor, private consumption will drive growth in the demand side, supported by a substantial increase in remittance inflows.

The World Bank projects a further rebound in growth of 4.6% in the next fiscal year. “However, the forecast is subject to multiple risks, including a growth slowdown in partner countries, notably India, Gulf countries, and Malaysia which could lead to a drop in remittances and tourism. Further business environment reforms aimed at attracting more private investment will be needed to support medium-term growth,” it added.

World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos, said strengthening the implementation of capital expenditure, boosting business confidence and strengthening Nepal’s international competitiveness are key to stimulating economic growth and reducing poverty.

The World Bank prepares the Nepal Development Update in parallel with the South Asia Development Update twice a year. The April 2024 edition of the South Asia Development Uppdate shows growth in South Asia is again higher than any other emerging market and developing country region in the world, projected at 6% in 2024 and 6.1% in 2025. “But this strong outlook is deceptive. For most countries, growth is still below pre-pandemic levels and is reliant on public spending. At the same time, private investment growth has slowed sharply in all South Asian countries, and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population,” the report added.

Published On: 02 Apr 2024


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