3.4% GDP growth estimated for 1st quarter of FY

Kathmandu, Jan. 8: The National Statistics Office (NSO) has made a preliminary estimate of 3.4 per cent growth in the gross domestic product (GDP) at the constant price in the first quarter of the current fiscal year 2024/25.

In the seasonally unadjusted quarterly GDP report made public on Tuesday, the NSO has estimated an increase of 3.4 per cent in GDP in the first quarter of the current fiscal year as compared to the first quarter of the previous fiscal year 2023/24.

The positive growth of the economy in this quarter was mainly attributed to the increase in agricultural production, increase in electricity generation and distribution, rise in tourism arrivals, and increase in total value addition in the hotel sector.

In addition, growth in the transportation sector, healthcare services and public administration have led to positive growth in the overall economy, said the report. 

The economic growth is expected to remain modest, particularly due to the negative impact of floods and landslides during this period and the failure of the construction sector to achieve positive growth.

The total value-added growth rate of 17 industrial sectors out of the total 18 industrial classifications presented in the economy has been positive during the first quarter of the current fiscal year 2024/25 as compared to the previous fiscal year 2023/24.

Among them, electricity and gas-related activities have the highest growth rate of 21.4 per cent, while the transportation and storage sector is the second fastest-growing industrial sector with a growth rate of 6.7 per cent. Similarly, the value addition of accommodation and food service activities sector is estimated to grow by 6.3 per cent. 

Similarly, with the increase in deposits and loans, the value-added growth rate of the financial and insurance sector is estimated to be 5.7 per cent.

The growth rate of the administrative support services sector is estimated at 5.4 per cent and the growth rate of professional, scientific and technical services at 5.1 per cent.

On the other hand, the construction sector is estimated to have contracted slightly (0.3 per cent) due to a decline in imports of construction materials in the first quarter of the current fiscal year 2024/25.

The agriculture, forestry and fisheries sector, which accounts for the largest share of the economy, is estimated to have a value-added growth rate of 3 per cent, said the NSO.

The increase in the production of summer crops, including paddy, as well as the increase in vegetable and cash crops and livestock production, seems to have had a positive impact on the total value added of this sector. 

The increase in agricultural production is attributed to the timely availability of fertilisers, the use of improved seeds, and adequate monsoon rainfall.

However, the total value added of the agriculture sector could not increase significantly due to the damage caused by floods and landslides during the rainy season.

According to the Office, the wholesale and retail trade sector, the second largest sector of the economy, is estimated to grow by only 0.5 per cent in the first quarter of the current fiscal year. The value-added growth rate of the manufacturing sector remained positive at 2.3 per cent this quarter.

Similarly, the growth rate of other sector activities, including education (0.4 per cent), health (4.1 per cent), and real estate transactions (3.1 per cent), remained moderate during 

this quarter.

However, seasonally adjusted quarterly gross domestic product at the constant price is estimated to increase only by 0.2 per 

cent in the first quarter of the current fiscal year compared to the fourth quarter of the last 

fiscal year.

Looking at seasonally adjusted quarterly gross value addition, economic activities increased in 12 of the total 18 economic sectors in the first quarter of the current fiscal year (Shrawan, Bhadra and Ashoj) compared to the fourth quarter of the previous fiscal year (Baishak, Jestha and Asar), said the NSO. 

The overall gross domestic product is estimated to grow marginally in the first quarter of the current fiscal year due to the impact of negative growth in six out of a total 18 industrial sectors and modest growth in other sectors.

During the review period, the electricity, gas, steam and air conditioning supply sector is expected to grow at the highest rate of 8.5 per cent, followed by the information and technology sector at 7.7 per cent. 

The transportation and storage is estimated to grow at 3.1 per cent, financial and insurance activities at 2.6 per cent, real estate activities at 2.1 per cent, professional, scientific and technical activities at 2.1 per cent and human health and social work activities at 1.9 per cent.

Similarly, the growth rate of the agriculture, forestry and fisheries sector has reached a marginally negative rate (0.8 per cent), while the growth rate of the overall economy is estimated to be limited to 0.2 per cent.

Among the six industrial sectors experiencing negative growth, the mining and quarrying sector had the highest negative growth rate of 13.9 per cent, followed by the trade sector of 3.7 per cent).

The Office estimates that water supply, sewerage, waste management will decrease by 0.3 per cent, construction by 0.6 per cent and manufacturing by 0.2 per cent during the first quarter of the current fiscal year as compared to the fourth quarter of the last fiscal year.