Resource

NEPAL DEVELOPMENT UPDATE : MAXIMIZING FINANCE FOR DEVELOPMENT

November 04, 2018

In FY2018, growth in Nepal remained strong at 6.3 percent despite less favorable monsoons and the easing of growth from the rebound following the 2015 earthquake. Continued strong activity in construction boosted private investment. Government activities and programs geared toward earthquake reconstruction and the establishment of offices at decentralized levels underpinned public investment. Private consumption was also a key driver of growth, financed by an uptick in remittances, in the last quarter of 2018. These trends coupled with record tourist arrivals, the reduction of load shedding, and an expansion of manufacturing capacity, all helped sustain growth. Inflation was 4 percent, anchored by the peg to the Indian rupee. Prices for non-food items grew at 5.5 percent, while food prices rose by 3.1 percent.