World Bank projects 4.1 percent growth rate in 2023
Nepal’s economic growth rate is projected to remain at 4.1% in 2023, according to the latest Nepal Development Update released by the World Bank. The report, entitled ‘Fine-tuning Policy in a Turbulent Environment’, also suggests that the country’s economic growth rate is likely to reach 4.9% in 2024, thanks to a boost in tourism, remittance, and easing monetary policy.
Finance Secretary Toyam Raya and World Bank Country Director Farid Haddad Zarvos jointly released the report in Kathmandu. Raya announced that revenue collection, which had previously been dropping, was now on the rise, and expressed hope that the tourism, agriculture, remittance, and hydropower sectors would contribute significantly to the country’s economy in 2023.
Despite the positive projections, the report notes that inflation in South Asia is set to reach 8.9% in 2023 before dropping to 7% in 2024. The report also emphasizes the need for policy departure to tackle present problems of price hike, low capital spending, and governance irregularities.
Barsha Shrestha, Business Head at ICRA Nepal, called for radical changes in present policy for the sake of long-term economic interests, while Chief of Department of Economics at Tribhuvan University, Prof Dr Shivaraj Adhikari, emphasized the importance of policy departure to tackle the present economic challenges. The report also raises the question of whether Nepal will consider taking assistance from the IMF, as other South Asian countries have done, to help alleviate the impact of the economic downturn.