Nepal’s economy is projected to grow by 3.4 percent in the first quarter (mid-July to mid-October 2024) of the current fiscal year. According to the latest report released by the National Statistics Office on Tuesday, the gross domestic product (GDP) is estimated to grow by 3.4 percent at basic prices during this period, compared to the first quarter of the previous fiscal year (2023/24).

The report projects a marginal growth of 0.2 percentage points compared to the last quarter of the previous fiscal year, which recorded an economic growth rate of 3.2 percent. This indicates a slow but steady recovery in Nepal’s economic indicators.

The National Statistics Office has identified several factors driving this growth. An increase in agricultural production, higher electricity generation and distribution, a rise in tourism arrivals, and growth in the total value added in the hotel sector are the primary contributors. Furthermore, growth in the transport, health services, and public administration sectors has also supported the economy’s positive trajectory.

However, the report also highlighted challenges limiting the potential for higher growth. Floods and landslides during the quarter adversely impacted economic activity, while the construction sector failed to achieve positive growth. These factors are expected to constrain the overall economic expansion for this period.

Among the 18 industrial sectors analyzed, 17 are projected to grow positively. The electricity and gas sector is expected to achieve the highest growth rate of 21.45 percent, followed by the transport and warehousing sector with a growth rate of 6.7 percent. In contrast, the construction sector is anticipated to contract by 0.3 percent, marking the only negative growth among the sectors.