ADB projected Nepal’s economic growth to be 3.9 percent

KATHMANDU: APRIL. 6 – Nepal’s economic growth is expected to be 3.9 percent in 2022, according to the Asian Development Bank (ADB). The projection was made by the Asian Development Bank in its Asian Development Outlook 2022.

This fiscal year, the government has set a growth target of 7%. However, the Asian Development Bank (ADB) predicts that Nepal’s economic growth will be 4 percentage points lower than its target.

The ADB forecasted 2.3 percent economic growth in 2021.

According to the ADB, economic growth is expanding and improving as a result of the global COVID-19 epidemic vaccination campaign.

Arnaud Cauchois, ADB Country Director for Nepal, said: “The slowdown in economic growth in developed countries due to the Russia-Ukraine war and the disruption in world trade and the rise in prices of oil and other commodities could exacerbate the currency situation and put further pressure on Nepal’s balance of payments and foreign exchange reserves.”

The Asian Development Bank estimates that unseasonal rains and floods will reduce paddy production by 9% this year. The industrial sector is expected to grow at 4.1 percent, while the wholesale and retail trade, transportation, and financial services sectors are expected to grow at 5.2 percent, and tourism is expected to improve.

As the international price of oil rises, so will the cost of transportation and production, causing inflation to rise. According to the ADB, inflation will average 6.5 percent in 2022.

According to the ADB, foreign exchange reserves will also fall as a result of higher imports and lower exports.