Asian Development Bank Forecasts 3.6% Growth for Nepal's Economy in 2024, Citing Improved Confidence and Government Spending
The Asian Development Bank (ADB) has unveiled its projections for Nepal's economic growth, forecasting a 3.6 percent expansion at market prices for the year 2024. This outlook marks a notable uptick from the estimated 1.9 percent growth recorded in fiscal year 2023. ADB Country Director for Nepal, Arnaud Cauchois, attributes the anticipated growth to a combination of factors, including a gradual easing of monetary policy, bolstered consumer and investor confidence, and increased government capital spending in the latter half of the fiscal year. Additionally, the growth outlook is buoyed by expectations of accelerated growth in the service sector and marginal improvements in agriculture, despite challenges posed by deficient winter rainfall.
The ADB's Asian Development Outlook (ADO) for April 2024 underscores a positive trajectory for Nepal's economic landscape. Notably, the report predicts a decline in annual average inflation to 6.5 percent for fiscal year 2024, down from 7.7 percent in the previous fiscal year. This shift is attributed to subdued oil prices and a decrease in inflationary pressures from India, a key trading partner and import source for Nepal. Despite these optimistic projections, the ADB cautions against external risks, particularly highlighting the potential impact of global economic downturns on Nepal's tourism and remittance sectors, as well as geopolitical uncertainties that could disrupt supply chains and tighten financial conditions.
Amidst ongoing economic analyses, the ADB reaffirms its commitment to supporting Nepal's journey towards prosperity, inclusivity, resilience, and sustainability. As a cornerstone of its mission to eradicate extreme poverty, the ADB emphasizes its dedication to providing assistance and fostering economic development in Nepal and across the broader Asia-Pacific region. Established in 1966 and boasting ownership by 68 member countries, including 49 regional stakeholders, the ADB continues to prioritize initiatives aimed at driving inclusive growth and fostering long-term economic stability and prosperity.
