Macroeconomic Update: Nepal (April 2022)

Nepal’s economy is estimated to have modestly expanded by 2.3% in fiscal year 2021 after contracting by 2.1% in FY2020. GDP growth will likely modestly increase to 3.9% in FY2022 underpinned by the ongoing vaccination campaign that will repress infection flare ups, fostering a gradual normalization in economic activity and a steady path to higher growth supported by accommodative macroeconomic policies. GDP growth is forecast at 5.0% in FY2023 on the expectation that immunization of the population against COVID-19 continues to progress, enabling further revival of economic activities that have gradually picked up since FY2021.