World Bank predicts 3.3% economic growth for Nepal in FY24

KATHMANDU: The World Bank (WB) has forecasted Nepal's economy to grow by 3.3% in the fiscal year 2024.

This growth is expected to be driven by a revival in tourism and an increase in hydropower exports.

The WB's report highlights that private consumption will play a key role in driving growth, supported by a significant rise in remittance inflows.

Although Nepal's economy is on a recovery path, private investment remains sluggish.

However, the WB anticipates a further growth rebound, projecting a 4.6% increase in FY25.

Despite these positive projections, the forecast is subject to risks, including potential slowdowns in key partner countries like India and Gulf nations, which could impact remittances and tourism.

To sustain growth, the WB emphasizes the need for reforms to improve the business environment and attract more private investment.

Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka, stressed the importance of implementing capital expenditure, enhancing business confidence, and boosting Nepal's international competitiveness to foster economic growth and reduce poverty.

The report highlights the importance of policies aimed at promoting firm growth, employment, trade openness, business climate improvement, financial sector reform, education enhancement, and women's rights protection to unlock Nepal's full economic potential and accelerate job creation and productivity growth.