Nepal's economic growth estimates 4.1 per cent in FY 2023: ADB

Kathmandu, April 4: Nepal's economic growth rate is estimated to remain around 4.1 per cent in fiscal year (FY) 2023.

The Asian Development Outlook (ADO) April 2023, the latest edition of the Asian Development Bank's (ADB) flagship economic publication of 4 April 2023, reads that the growth rate going to be slightly moderated to 4.1 per cent in the FY 2023, which is down from an estimated growth rate of 5.8 per cent in FY 2022.

The publication stated that Nepal's gross domestic product (GDP) growth is projected to slow largley due to tight monetary policy, slackened domestic demand, the unwinding of COVID-19 stimulus and persistent global headwinds. 

According to the publication, agriculture growth is likely to moderate around 2.0 per cent in FY 2023, down from 2.3 per cent in FY 2022. 

Due to high interest rates, import restriction measures, slowdown in domestic consumption, and dampened external demand that have been affecting manufacturing and construction subsectors is likely to decelerate industrial growth rate.

Service growth is also expected to moderate to 4.4 per cent down from 5.9 per cent in FY 2022.

In the meantime, inflation is expected to edge up to 7.4 per cent in FY 2023 from 6.3 per cent in FY 2022, amid the tight monetary policy reigning in demand.

The current account deficit is estimated to narrow to 4.0 per cent of GDP in FY 2023 on the back of declining trade deficit amidst buoyant remittance inflow.