INSUBCONTINENT EXCLUSIVE:
KATHMANDU, APRIL 2The World Bank (WB) has said that Nepal's economy is expected to grow by 3.3% in FY24, driven by
revived tourism and a pickup in hydropower exports.
WB projects inflation to remain at 6.7 percent in 2024
World Bank to provide Rs 26.51 billion for growth reforms, better local roads in Nepal
On the demand side, private consumption will drive
growth, supported by a substantial increase in remittance inflows, according to the World Bank's twice-a-year country development update.In
its latest Nepal Development Update, the WB stated that the country's economy is on a recovery path, but private investment remains low
while projecting a further rebound in growth of 4.6% in FY25.
However, the forecast is subject to multiple risks, including
a growth slowdown in partner countries, notably India, Gulf countries, and Malaysia which could lead to a drop in remittances and
tourism.Further business environment reforms aimed at attracting more private investment will be needed to support medium-term
growth."Strengthening the implementation of capital expenditure, boosting business confidence, and strengthening Nepal's international
competitiveness are key to stimulating economic growth and reducing poverty," said Faris Hadad-Zervos, World Bank Country Director for
Maldives, Nepal, and Sri Lanka.The Nepal Development Update is prepared in parallel with the South Asia Development Update, a twice-a-year
World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges countries face
The April 2024 edition titled Jobs for Resilience shows growth in South Asia is again higher than any other emerging markets and developing
country region in the world, projected at 6% in 2024 and 6.1% in 2025
But this strong outlook is deceptive, says the report
For most countries, growth is still below pre-pandemic levels and is reliant on public spending
At the same time, private investment growth has slowed sharply in all South Asian countries, and the region is not creating enough jobs to
keep pace with its rapidly increasing working-age population."South Asia is failing right now to fully capitalize on its demographic
This is a missed opportunity," said Franziska Ohnsorge, World Bank Chief Economist for South Asia
"If the region employed as large a share of the working-age population as other emerging markets and developing economies, its output could
be 16% higher."The South Asia Development Update recommends a range of policies to spur firm growth and boost employment, including
increasing trade openness, improving business climates and institutions, removing financial sector restrictions, improving education, and
strengthening legal protection of women's rights
And these measures would also help lift employment growth and boost productivity, and free up space for public investments in climate
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