First quarter economic growth highest in three years

Kathmandu, Jan. 15: The economic growth rate in the first quarter of the current Fiscal Year 2025/26 has gone beyond that of the previous two years. 

The Gross Domestic Product (GDP) registered a nominal growth of 3.02 per cent in the first quarter this year from 2.9 per cent in the same period of 2024/25 and 2.9 per cent in 2023/24, the National Statistics Office (NSO) informed in its first quarterly report published on Wednesday. 

Based on seasonally adjusted data, the preliminary estimate indicates that quarterly gross value added at basic prices contracted by 1.68 per cent in the first quarter this year compared to the fourth quarter of last year. 

“Compared to the fourth quarter of last year, the overall gross value added in the first quarter this year is estimated to have been negative due to negative growth recorded in 13 out of the total 18 industrial classifications presented, along with only modest growth in the remaining sectors,” said the NSO.

According to it, the preliminary estimate indicates that the total gross value added growth rate of all 18 industrial classifications presented in the economy remained positive this year against that of 2024/25.

Among these, electricity and gas-related activities recorded the highest growth rate (14.91 per cent). 

This was followed by financial and insurance activities, and professional, scientific and technical activities, which are estimated to have grown by 7.07 per cent and 5.52 per cent respectively.

The agriculture sector, which contributes the most to the economy, is estimated to have grown by 1.36 per cent.

The NSO maintained that although a decline in paddy production was witnessed, modest growth in livestock, vegetable crops and fruit production appears to have had a positive impact on the sector’s overall gross value added. 

Likewise, the wholesale and retail trade sector, which constitutes the second largest share of the economy, is estimated to have recorded a growth rate of 3.89 per cent this year. This growth is attributed to increase in domestic production and imports of trade-related goods.

4.8% all-time high growth rate

However, compared to the growth rate of 4.8 per cent – the highest in the last thirteen quarters – of the last quarter of 2025/26 and the second quarter of 2023/24, the growth rate is not satisfactory. In the second quarter of 2022/23, the growth rate stood at -1.0 per cent, while it hovered between 2.3 per cent and 4.8 per cent. Likewise, in comparison to the first quarter of 2024/25, the growth rate in the first quarter of the current fiscal year is observed to have remained moderate overall due to contraction seen in the production of food crops, forest products, livestock products, and domestically produced manufacturing materials, said the NSO. 

But in this quarter, owing to growth in various activities such as electricity generation and distribution, financial activities, animal production, fruits and vegetables, trade services, and tourism arrivals, the gross value added growth rate is estimated to increase by 3.02 per cent, according to preliminary estimates.