Banking News – Nepal’s economic growth rate is estimated to decline due to the flood in the Bhote Koshi in Rasuwa on Bhadau 10. The World Bank has projected that Nepal’s economic growth rate will be limited to 3.7 percent in fiscal year 2083/84 due to disruptions in the industrial and service sectors caused by the flood.

According to the World Bank’s latest development update report, with the start of reconstruction and rehabilitation activities, economic activities are expected to receive support, and the economic growth rate is expected to rise to 5.2 percent in fiscal year 2084/85. The government has set a target of 7 percent economic growth in the current fiscal year. The Nepal Development Update report titled “Rebuilding Differently for the Future,” made public on Tuesday, estimates that the industrial sector will be the main obstacle to Nepal’s economic growth due to the extensive damage caused by the flood.

It has been pointed out that although the impact of damage in the agricultural sector will be limited in overall production, there will be a significant impact on the livelihoods of people in the affected areas.

“The Rasuwa flood has caused massive damage to human and economic sectors. This is also an opportunity for Nepal to reconsider its infrastructure — such as road and communication networks, energy, drinking water and sanitation, health, and education. Especially in the context of climate change and changing risks, it is necessary to give important space to resilience and alternative arrangements in infrastructure planning and investment.”

“The World Bank is ready to support the Government of Nepal in investing in systems and implementing the right policies needed to move Nepal toward a more resilient and sustainable development path,” said David Sislen, World Bank Division Director for Maldives, Nepal, and Sri Lanka.

As Nepal moves from rescue and relief toward reconstruction, the report suggests that the World Bank should not limit itself to the task of restoring damaged structures but include an updated assessment of multi-hazard risks, carefully consider the location and design of infrastructure, and ensure additional alternative arrangements in critical networks of transportation, energy, and communication.

The report suggests strengthening disaster early warning systems and building an integrated social protection system as a basis for rapidly providing post-disaster assistance to families in crisis. The recent South Asia Economic Update report, “Using Artificial Intelligence (AI) for Economic Growth,” has projected South Asia’s economic growth rate to reach 6.9 percent this year. Due to strong domestic demand, the region’s economy is expected to remain resilient against global shocks. In 2027, however, economic growth is estimated at 6.7 percent.