3.87 percent GDP growth projected in the current fiscal year

The economy is expected to experience improvement in the current fiscal year 2023/24, particularly with the expansion of the service sector, the National Statistics Office (NSO) said in its economic forecasts for the current fiscal year.

In its preliminary national accounts estimates, the NSO has forecast a 3.87 percent economic growth (based on market prices) for the current fiscal year. Nepal's gross domestic product at consumer prices is estimated to reach Rs 5,704 bn in the current fiscal year. Likewise, the NSO has revised the size of the country’s economy in the previous fiscal year to Rs 5,348 bn.

The projections for the current fiscal year were based on the data of the first eight months of fiscal year 2023/24 and on assumption that the economy will continue to progress normally in the remaining period, according to the NSO.

The estimates, which have categorized the economy into 18 sectors, show progress in most sectors compared to the previous fiscal year.  The NSO has revised the economic growth rate of the previous fiscal year to 1.95 percent.

The service sector is forecast to experience the highest growth rate in the current fiscal year. Contributing an estimated 62.9 percent to the economy, the sector is projected to grow by 4.50 percent which is higher than the overall growth forecast.

Additionally, the primary sector, comprising agriculture and mining, is expected to grow by 3.03 percent. In the previous fiscal year, this sector's growth rate was estimated at 2.72 percent. Likewise, the secondary sector, which encompasses production, is projected to have the lowest growth rate of 1.20 percent, even lower than the previous fiscal year's estimate of 1.40 percent.

However, the industry and construction sectors are anticipated to experience negative growth in the current fiscal year. The industry sector's growth rate is forecast at -1.60 percent. Similarly, the construction sector is projected to have a negative growth rate of -2.07 percent in the current fiscal year.

Among other sectors, accommodation and food services are expected to record the highest growth rate of 21.84 percent percent, followed by electricity and gas with 17.44 percent, transportation and storage services with 11.89 percent, financial and insurance services with 7.80 percent, and human health and social work activities with 5.52 percent. The remaining sectors are projected to have growth rates below 5 percent.

Preliminary estimates suggest that exports will account for 7.94 percent of Nepal's gross domestic product in 2023/24, an improvement from the revised estimate of 6.96 percent in the previous fiscal year. Similarly, imports are estimated to constitute 33.70 percent of the GDP, compared to the revised estimate of 34.68 percent in the previous fiscal year. Likewise, remittances are expected to account for 22.96 percent of the gross domestic product in 2023/24, while the revised estimate for 2022/23 was 22.82 percent.

Per capita income reaches Rs 195,000

The annual average income of Nepalis is estimated to reach approximately Rs 195,000 in the current fiscal year. In US dollar terms, per capita income is projected to rise to 1,456, a rise of $51 compared to the previous fiscal year.  Nepalis are expected to spend 92.38 percent of their total income on consumption in the current fiscal year, according to the report.