World Bank projects Nepal’s economic growth to slow to 2.1 percent

KATHMANDU: The World Bank has projected Nepal’s economic growth rate to remain limited to 2.1 percent in fiscal year 2025/26.

Releasing its South Asia Development Update on Tuesday, the World Bank said the recent protests in Nepal have disrupted both public and private infrastructure, leading to slower economic growth.

It noted that Nepal’s growth had improved in fiscal year 2081/82 B.S. compared to the previous year, driven by hydropower, industrial production, and agriculture.

However, the Bank warned that ongoing political instability could negatively impact growth, estimating it could range between 1.5 and 2.6 percent this fiscal year. It added that the unrest may also affect tourist arrivals and the insurance sector.

The report further mentioned that weakened investor confidence could hurt private investment, while delayed monsoon rains may reduce rice output.

In the region, the World Bank projected economic growth of 4.8 percent for Bangladesh, 7.3 percent for Bhutan, 6.5 percent for India, 3.9 percent for the Maldives, and 3.5 percent for Sri Lanka.