Nepal's economy grew by 5.1% in the second quarter of the current fiscal year (FY 2024/25), according to the estimates of the National Statistical Office (NSO). However, after adjusting for weather-related impacts, the actual growth rate stood at 2.2%.

Releasing the preliminary gross domestic product (GDP) estimates on Wednesday, the NSO stated that despite improvements in sectors such as transportation, overall GDP growth remained modest. The reported 5.1% growth rate did not account for the effects of adverse weather conditions, which significantly impacted certain industries.

The office highlighted that expansion in transportation, construction, agriculture, electricity generation and distribution, as well as financial intermediation, contributed to the overall economic performance. However, sluggish progress in education, housing, food, and other service sectors kept the growth rate moderate.

Based on weather-adjusted data, two out of 18 sectors experienced negative growth. The electricity and gas sector contracted by 4.8%, while housing and food services declined by 2.7%. In contrast, transportation and storage recorded the highest growth at 14.2%, followed by mining and quarrying at 9.5%.

The construction sector’s total value-added growth rate was estimated at 9.1%, driven by increased imports of construction materials and domestic production. Similarly, the financial and insurance sector grew by 6.6%, supported by a 7.4% expansion in manufacturing and a rise in deposits and loans. The trade sector grew by 6.1%, while the information and technology sector expanded by 4.9%.

The agriculture sector, which is the largest contributor to the economy, grew by 3.2%. Increased production of rice, vegetables, ginger, winter fruits, and livestock products played a significant role in boosting the sector’s overall value addition. -- RSS