KATHMANDU, March 27: Government data showed that the country’s economy grew by 5.1 percent in the second quarter of the current fiscal year (FY) 2024/25.
The National Statistics Office released the Gross Domestic Product (GDP) data for the second quarter on Wednesday, highlighting improvements in sectors like transportation while noting that overall GDP growth remained modest. However, this growth rate does not account for seasonal adjustments. After adjusting for seasonal effects, the GDP growth rate stood at 2.2 percent.
The office stated that transportation, construction, agriculture, electricity production and distribution, and financial intermediation primarily drove the positive growth in the second quarter. However, limited growth in education, housing, food services, and other service sectors kept overall economic growth moderate.
Based on seasonally adjusted data, two out of 18 industrial sectors saw negative growth. The electricity and gas sector shrank by 4.8 percent, while the housing and food services sector contracted by 2.7 percent.
Nepal's informal economy is 41 percent of GDP
Non-seasonally adjusted data shows that the transportation and storage sector grew the most, recording a 14.2 percent growth rate. The mining and quarrying sector followed as the second fastest-growing industrial sector with a 9.5 percent growth rate.
Increased imports of construction materials and growth in domestic production contributed to a 9.1 percent rise in the construction sector's gross value-added growth. The manufacturing sector expanded by 7.4 percent, while the financial and insurance sector grew by 6.6 percent, driven by a surge in deposits and loans.
Additionally, preliminary estimates indicate that the trade sector expanded by 6.1 percent, while the information and technology sector grew by 4.9 percent.
According to preliminary estimates, the agriculture sector, which contributes the most to the national economy, is expected to grow by only 3.2 percent. The report states, "The increase in rice production, along with growth in vegetables, citrus fruits, winter fruits, and livestock products, has positively impacted the sector's overall value addition."
The wholesale and retail trade sector, the second-largest in the economy, has expanded due to increased domestic production and a rise in imports of major trade goods.
Similarly, gradual improvements in industrial goods production have significantly boosted the manufacturing sector, according to initial estimates. In the second quarter, the public administration and defense sector is projected to grow by 2.2 percent, while both the health sector and real estate sector are expected to expand by 3.1 percent each.
