Bagmati’s economic growth projected at 5.2% in 2024/25

By Rammai Dahal,Makwanpur, Nov. 12: The economic growth rate of Bagmati Province is expected to increase to 5.2 per cent in the Fiscal Year 2024/25 compared to the previous FY 2023/24. According to the economic activity report of the province published by the Nepal Rastra Bank (NRB), this is an increase from the growth rate of 3.7 per cent in the previous fiscal year. 

Bagmati Province contributed 36.5 per cent to Nepal’s total Gross Domestic Product (GDP). 

In the current FY 2024/25, the delayed monsoon has hurt the agriculture sector, while the economy also experienced some damage during the September-October period due to the Gen Z movement. However, following the formation of the new government after the movement, which has focused on peace, security, good governance, and reconstruction, economic reforms have been introduced, leading to a positive impact on the economy.

Preliminary estimates indicate that agriculture, industry, and services contributed 11.8 per cent, 11.1 per cent, and 77.1 per cent, respectively, to the province’s total GDP in the last fiscal year. During this period, the production of millet increased by 5.2 per cent, rice production grew by 1.1 per cent, maize by 5 per cent, while pulses, wheat, and barley decreased by 5.1 per cent, 18.5 per cent, and 32.6 per cent, respectively. 

Similarly, vegetable and horticulture production increased by 16.2 per cent, while egg production grew by 2.7 per cent. However, milk production decreased by 1.2 per cent and meat production by 2.9 per cent.

The average industrial production capacity in the province was 38.7 per cent during the study period, compared to an average of 44.3 per cent in the same period last year. Over the past three fiscal years, a total of 1,235.48 km of new roads have been constructed in Bagmati, read the NRB report. 

According to the report, in the last fiscal year, 90.42 km of new roads were built, and there were upgrades to 148.93 km of gravel roads and 362.23 km of paved roads. Additionally, 37 road bridges and seven suspension bridges were constructed.

According to preliminary data from the National Statistics Office, the GDP of Bagmati Province (at current prices) for the last fiscal year is estimated to reach Rs. 2.23 trillion. 

The highest contribution to the GDP of the province comes from wholesale and retail trade, as well as vehicle and motorcycle repair services, which account for 22.6 per cent of the total GDP. 

The share of the productive industries sector is 4.9 per cent. When comparing the economic conditions of different provinces, Bagmati Province contributed the highest share (36.5 per cent) to the country's total GDP in the last fiscal year.

The report also highlights the challenges faced by the province in terms of infrastructure development, such as roads, healthcare services, drinking water, sewage, waste management, and the development of organised settlements with proper management. 

Moreover, the province faces significant risks from natural disasters, such as floods, landslides, and soil erosion. The report stresses that mitigating the impact of these disasters and reducing the associated damage remains a major challenge.