World Bank projects Nepal economic growth to slow to 3.7 percent

Nepal's economic expansion is projected to decelerate to 3.7 percent during fiscal year 2083/84, according to an assessment released by the World Bank. The downgrade follows severe disruptions caused by the destructive Rasuwa floods that struck on 10 Bhadra. Key impacts across industrial operations and the service sector have tempered economic momentum across the country, limiting near-term output. Economic momentum is anticipated to recover to 5.2 percent in the following fiscal year 2084/85 as rebuilding and rehabilitation projects get underway. A press release noted that although overall agricultural production impacts remain contained, the livelihoods of communities residing in affected localities are likely to experience notable consequences. South Asia's regional expansion is projected to moderate to 6.7 percent by 2027. The institution's development update advised authorities against rebuilding damaged structures in identical configurations. It urged the strengthening of disaster early-warning mechanisms and the establishment of an integrated social protection framework to distribute post-disaster assistance swiftly to vulnerable households. Furthermore, Franziska Ohnsorge, the World Bank Group's chief economist for the region, noted that adopting artificial intelligence offers prospects to raise labour productivity, widen export markets and improve public service delivery across South Asia.