Nepal’s economy is estimated to have expanded by 3.02 per cent in the first quarter (mid-July to mid-October) of the current fiscal year 2025/26, according to preliminary estimates.
The National Statistics Office (NSO) has made public its first-quarter estimate of economic growth. Compared to the first quarter of FY 2024/25, the economy in the current fiscal year is projected to grow by 3.02 percent.
According to the NSO’s analysis, the growth rate in the first quarter remained modest due to a contraction in the production of food crops, forest products, non-life insurance, construction materials for domestic production, and other sectors.
On the other hand, growth in electricity generation and distribution, financial activities, livestock production, fruits and vegetables, trade services, and tourist arrivals supported overall economic expansion, the office said.
The NSO noted that all 18 industrial sectors included in the calculation of the economy posted positive expansion during this quarter.
However, based on seasonally adjusted data, when comparing gross domestic product (GDP) at basic prices, the economy contracted by 1.68 percent in the first quarter of the current fiscal year compared to the fourth quarter of the previous fiscal year.
Out of the 18 industrial sectors, 13 recorded negative growth during this quarter, which had an impact on the overall economy.
Electricity and gas drive growth
Among industrial sectors, activities related to electricity and gas recorded the highest value addition in the first quarter, with a growth rate of 14.91 percent.
This was followed by financial and insurance activities, which grew by 7.07 percent, and professional, scientific and technical activities, which expanded by 5.52 percent.
Agriculture, the largest contributor to the economy, recorded a growth rate of just 1.36 percent. The lower growth in agriculture is attributed to an estimated decline in paddy production.
However, the office reported increased production in livestock, vegetables and fruits. Wholesale and retail trade, the second-largest contributor to the economy, is estimated to grow by 3.89 percent.
The sector remained positive due to growth in domestic production and imports of trade-related goods. The lowest growth rate during the quarter was recorded in water supply, sewerage, waste management and remediation activities, at 1.11 percent, followed by human health and social work activities at 1.19 percent.
Compared to the final quarter of the previous fiscal year, mining and quarrying, public administration and defence, and social security recorded the highest negative growth rates.
In contrast, electricity and gas, information and communication, and professional, scientific and technical services are estimated to have recorded higher growth. Agriculture, the largest contributor to the economy, contracted by 1.65 percent during this period.
The Gen Z movement took place during the first quarter of the current fiscal year. Despite this, positive effects were observed as the new government energised the construction sector.
However, the industrial sector has not shown strong momentum. While construction expanded by 3.26 percent, the industrial sector recorded growth of only 1.52 percent.
