The Asian Development Bank (ADB) has projected that the economic growth of Nepal for 2022/23 would be 4.7 percent. The estimate is lower than the government’s growth target of 8 percent announced via the budget distribution of the current year.

The ADB has downgraded Nepal’s growth forecast for the current fiscal year as the economy takes a beating from high inflation, slowed trade and monetary tightening.

ADB said economy of Nepal is estimated to expand by 4.7 percent in the fiscal year 2022-23, down from an estimated 5.8 percent in the last fiscal year.

According to an update of the flagship economic publication, Asian Development Outlook 2022, other factors affecting gross domestic product (GDP) growth includes the global geopolitical turmoil that may further dampen growth prospects.

Other indicators fueling low growth are inflation reaching near double digits, trade restrictions, squeezed real estate sector and low revenue base due to an import ban.

Besides, tourist numbers have not improved, and the government’s capital expenditure is very dismal. A rebound in tourism in Nepal could be interrupted by the rising dengue fever caseload, aviation safety measures, and the general and provincial elections slated for November 20, insiders say.

“Nepal’s economy is estimated to modestly expand by 4.7 per cent in fiscal year 2023, down from an estimated growth of 5.8 per cent in FY2022,” the economic publication reads.

“Downside risks to growth may arise from further stringent measures by the authorities that may be necessary to curb import, which will depress domestic production and consumption, adversely affecting growth,” said ADB Country Director for Nepal, Arnaud Cauchois.