KATHMANDU, Oct 8: The World Bank (WB) has estimated Nepal’s economic growth rate to reach 5.1 percent in the fiscal year 2022/23, which is way higher than the projection of 4.7 percent made by the Asian Development Bank.
Why do the economic growth forecasts differ?
Unveiling the report entitled ‘Latest Macroeconomic Update,’ the WB has estimated the higher economic growth rate at the back of a rebound in the tourism business to support Nepal’s service sector and strong industrial growth triggered by increased hydroelectricity production. The multilateral lending organization, however, has revised the economic growth rate to 4.9 percent for fiscal year 2023/24.
While public debt levels are expected to stabilize and pressure on foreign exchange reserves is projected to ease, Nepal continues to face structural challenges relating to a modernization of the tax system, the attraction of new sources of foreign exchange (especially FDI) and full implementation of fiscal federalism that need to be addressed to ensure sustainable and inclusive growth, reads the WB report.
