Kathmandu, January 11
In its latest Global Economic Prospects report, the World Bank (WB) has forecast Nepal's economy will grow by 5.1 per cent in current fiscal 2022-23.
It was down from an estimated growth of 5.8 per cent in fiscal 2021-22. The World Bank has made a growth forecast of 4.9 per cent for fiscal year 2023-24.
According to the report, South Asia continues to be adversely affected by spillovers from the invasion of Ukraine, rising global interest rates, and weakening growth in key trading partners.
As a result, regional growth is estimated to have slowed to 6.1 per cent in 2022 and is projected to slow further to 5.5 per cent in 2023 - below previous projections on global spillovers - before picking up to 5.8 per cent in 2024. This pace reflects still robust growth in India, Maldives, and Nepal, offsetting the effects of the floods in Pakistan and the economic and political crises in Afghanistan and Sri Lanka.
The economic growth of Maldives, India and Bangladesh will be better than Nepal this year in this region.
Growth in India is projected to slow to 6.9 per cent in fiscal 2022-23, a 0.6 percentage point downward revision since June, as the global economy and rising uncertainty will weigh on export and investment growth.
Pakistan is forecast to grow at two per cent in current fiscal year, half the pace that was anticipated last June, and faces challenging economic conditions, including the repercussions of the recent flooding and continued policy and political uncertainty.
In Bangladesh, growth is expected to slow to 5.2 per cent in current fiscal year due to rising inflation and its negative impact on household incomes and firms' input costs, as well as energy shortages, import restrictions, and monetary policy tightening.
Food insecurity is rising in the region which consumes about one-fifth of its calories from wheat products, houses more than one-third of the global poor, and where food accounts for a greater share of its consumption basket compared to other emerging and developing economies. Although global food price inflation appears to have subsided, risks of increased deprivation and inadequate nutrition remain elevated, as per the report.
"Climate change is a significant threat in the region where extreme weather events can exacerbate food deprivation, cut the region off from essential supplies, destroy infrastructure, and directly impede agricultural production."
A version of this article appears in the print on January 12, 2023, of The Himalayan Times.
