Nepal’s economic growth estimated at 3.02pc in Q1 of FY 2082/83

KATHMANDU: Nepal’s economy is estimated to grow by 3.02 percent in the first quarter of the current fiscal year 2082/83, compared to the same period of the previous year, according to preliminary estimates released by the National Statistics Office (NSO).

Based on non-seasonally adjusted data, the NSO said overall gross domestic product (GDP) growth remained positive despite contraction in selected sectors such as food grain crops, forest products, non-life insurance, and construction materials. Growth in electricity generation and distribution, financial activities, livestock production, fruits and vegetables, wholesale and retail trade, and tourism-related services helped offset sectoral weaknesses and supported overall economic expansion.

The office stated that all 18 industrial classifications recorded positive year-on-year growth in the first quarter under the non-seasonally adjusted estimates.

Quarter-on-quarter contraction after seasonal adjustment

However, seasonally adjusted data present a less optimistic picture. Compared to the fourth quarter of fiscal year 2081/82, the economy is estimated to have contracted by 1.68 percent in the first quarter of the current fiscal year. Out of the 18 industrial classifications, 13 sectors recorded negative growth on a quarter-on-quarter basis, resulting in a mild overall contraction in GDP.

Officials noted that seasonal effects, base impacts, and lower momentum in several service and production sectors contributed to the quarter-on-quarter decline.

Electricity and finance lead sectoral growth

Sector-wise estimates show that electricity and gas-related activities recorded the highest growth at 14.91 percent, driven by increased power generation and distribution. Financial and insurance activities followed with an estimated growth of 7.07 percent, reflecting improved financial intermediation and service expansion.

Professional, scientific, and technical activities also posted a solid growth rate of 5.52 percent during the review period.

Agriculture growth remains modest

The agriculture sector, which remains the largest contributor to Nepal’s economy, is estimated to have grown by 1.36 percent in the first quarter. While paddy production declined, moderate growth in livestock, vegetable, and fruit production helped maintain positive value addition in the sector.

Trade and services support output

Wholesale and retail trade is estimated to have expanded by 3.89 percent, largely supported by higher production of trade-related goods and a pickup in imports. Growth in tourism and related services also contributed positively to overall economic performance.

In contrast, growth remained weakest in water supply, sewerage and waste management activities at 1.11 percent, and in human health and social work activities at 1.19 percent, indicating continued pressure in basic service delivery sectors.

The NSO cautioned that the figures are preliminary and subject to revision as more comprehensive data become available. The mixed signals from year-on-year growth and quarter-on-quarter contraction highlight the fragile nature of Nepal’s economic recovery, with sectoral imbalances and seasonal factors continuing to influence overall performance.