Nepal’s GDP shows 5.1 pc y-o-y growth in Q2 of FY 2024/25

KATHMANDU: Nepal’s economy recorded a 5.1% year-on-year growth in the second quarter of current fiscal year 2024/25 (mid-October to mid-January), as revealed by the latest data from the National Statistics Office.

The Seasonally Unadjusted Quarterly Gross Domestic Product (GDP) exhibited strong performance, with significant growth in key sectors such as transportation, construction, agriculture, and energy. Transportation and storage emerged as the leading sector, achieving a remarkable 14.2% growth, followed by mining and quarrying with a 9.5% increase, and electricity and gas growing by 9.2%. Construction posted a robust 9.1% growth, supported by a rise in domestic production and imports of construction materials. Meanwhile, agriculture, a crucial component of the economy, saw a 3.2% growth owing to improved yields in paddy, winter crops, and livestock.

On a quarter-on-quarter basis, the Seasonally Adjusted Quarterly GDP rose by 2.2% compared to the first quarter of the fiscal year. Among the 18 sectors assessed, 16 showed positive growth, while energy and hospitality sectors recorded declines of 4.8% and 2.7%, respectively. The transportation and storage sector led the quarterly growth with a 6.4% increase, while financial and insurance activities also demonstrated strength, growing by 3.9%.

The report underscores the significance of the Seasonally Unadjusted GDP for analysing year-on-year economic performance, while the Seasonally Adjusted GDP offers insights into short-term trends by eliminating seasonal effects. Policymakers are urged to address the challenges faced by underperforming sectors, such as energy and hospitality, to ensure sustained economic recovery.

Experts view the overall data as a positive indication of Nepal’s resilience and gradual recovery, highlighting the need for targeted measures to strengthen weaker sectors. The GDP estimates, developed using 2010/11 as the base year, reaffirm the country's economic progress and provide critical insights for future policy formulation.