Macroeconomic Update: Nepal (September 2017) | Asian Development Bank

Macroeconomic Update: Nepal (September 2017)

Institutional Document | September 2017

Nepal's GDP is forecast to grow by 4.7% in FY2018, down from a preliminary estimate of 6.9% in FY2017. Inflation is expected to rise to 6.5% in FY2018.

This edition of Macroeconomic Update provides a forecast for FY2018 growth and inflation. It also analyzes Nepal’s performance in real, fiscal, monetary and external sectors in FY2017. GDP is forecast to grow by 4.7% in FY2018, down from a preliminary estimate of 6.9% in FY2017, largely due to heavy rainfall during this monsoon that affected paddy and other major crops in the Terai belt of Nepal. This will likely depress farm output and economic growth in FY2018 and contribute to inflationary pressure.  Inflation is expected to rise to 6.5% in FY2018. With widening trade deficit and falling growth in remittances, current account deficit is expected to widen to 2.2% of GDP in FY2018 from a deficit of 0.4% of GDP in FY2017. The Issue Focus of this edition sheds light on prospects of Nepal’s services trade and suggests sector-specific policy recommendations.

Contents 

  • Executive Summary
  • Real Sector
  • Fiscal Sector
  • Monetary Sector
  • External Sector
  • Issue Focus: Unleashing the potential of trade in services in Nepal
  • Appendixes