Nepal’s economy grows by 3.2% in Q1-2080, boosted by mining and construction

Economic growth 3.2 percent in the first quarter, double-digit growth in four sectors

Nepal’s economy has recorded a 3.2% growth rate in the first quarter of the current fiscal year, according to the latest data from the National Statistics Office.

The growth rate is the same as the previous year’s first quarter, but lower than the government’s target of 6% for the whole year.

The statistics office said that the growth rate was driven by four sectors that achieved double-digit growth rates, namely mining and quarrying, financial and insurance, construction, and accommodation and food service.

The mining and quarrying sector registered the highest growth rate of 15.8%, reversing a negative trend of 1.9% in the same period last year. The sector benefited from the increased production of minerals, metals, and stones.

The financial and insurance sector grew by 13.2%, up from 9.9% last year, due to the rise in deposits and loans, changes in interbank interest rates, and higher insurance premiums.

The construction sector also performed well, with a growth rate of 11.4%, compared to a negative rate of 10% in the fourth quarter of the last fiscal year. The sector overcame the challenges of government payments and project delays, and contributed to the development of infrastructure and housing.

The accommodation and food service sector saw a significant improvement, with a growth rate of 11.7%, up from 56% last year. The sector was boosted by the surge in tourist arrivals, especially from India and China, as well as the domestic demand for hotels and restaurants.

However, not all sectors fared well in the first quarter. The wholesale and retail trade, automobile and motorcycle repair sector recorded a negative growth rate of 1.2%, down from 0.1% last year. The sector suffered from the decline in commercial goods, despite the overall increase in imports.

The agriculture, forestry and fishery sector, which accounts for the largest share of the economy, grew by only 1.4%, slightly higher than 1.3% last year. The sector was positively affected by the rise in rice production, but negatively affected by the fall in maize and wheat production.

The statistics office said that the growth rate of the first quarter reflects the economic activities that took place from mid-July to mid-October 2023. It said that the growth rate may change in the next quarters, depending on the impact of the COVID-19 pandemic, the monsoon season, and the political situation.

The following table highlights the grown volume of respective sectors of Nepal in Quarter 1 of 2080 B.S.

Sector	Growth Rate
Agriculture, forestry and fisheries	1.4
Mining and quarrying	15.8
Manufacturing industries	1.3
Electricity, gas and air conditioning supply	1.6
Water supply, sewerage and waste management	3.1
Construction	11.4
Wholesale and retail trade, motor vehicle and motorcycle repair	-1.2
Transportation and storage	1.6
Accommodation and service sector	11.7
Information and communication	3.1
Financial and insurance activities	11.7
Real estate activities	2.2
Professional, scientific and technical activities	5.1
Administrative and support service activities	8.8
Public administration and defense, compulsory social security	6.5
Education	0.8
Health and social activities	1.1
Arts, entertainment and other services	2.8
Average	3.2

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