Government data shows that Nepal’s economy expanded by 5.1% in the second quarter of the fiscal year 2024/25, with key contributions from transportation, construction, and financial intermediation. However, after adjusting for seasonal effects, the growth rate stood at a more modest 2.2%.
The National Statistics Office released the Gross Domestic Product (GDP) data on Wednesday, highlighting improvements in several sectors. While transportation, construction, agriculture, and electricity production boosted growth, limited expansion in education, housing, food services, and other service sectors kept overall economic progress moderate.
Based on seasonally adjusted data, two out of 18 industrial sectors experienced negative growth. The electricity and gas sector contracted by 4.8%, while the housing and food services sector shrank by 2.7%.
Sector-Wise Growth Trends
- Transportation & Storage: The fastest-growing sector, expanding by 14.2%.
- Mining & Quarrying: The second fastest-growing sector, rising by 9.5%.
- Construction: Increased imports of materials and higher domestic production led to a 9.1% growth.
- Manufacturing: Expanded by 7.4%, driven by improvements in industrial goods production.
- Financial & Insurance Services: Grew by 6.6%, fueled by rising deposits and loans.
- Trade: Preliminary estimates indicate a 6.1% expansion, while the information and technology sector grew by 4.9%.
- Agriculture: Expected to grow by 3.2%, supported by increased rice production, vegetables, citrus fruits, and livestock products.
The wholesale and retail trade sector, Nepal’s second-largest economic contributor, saw growth due to increased domestic production and rising imports of major goods. Meanwhile, the public administration and defense sector is projected to grow by 2.2%, with the health and real estate sectors expected to expand by 3.1% each.
Despite positive momentum in key industries, the economy faces challenges from weak growth in essential services and a contracting energy sector. The government continues to monitor economic trends and explore strategies to sustain long-term growth.
