KATHMANDU, Dec. 1 (Xinhua) -- Nepal's central bank admitted on Monday that the country will not be able to achieve its targeted economic growth for the current fiscal year 2025-26, due to the delayed monsoon and damage to crops and other sectors caused by floods and landslides. The Nepali government had targeted an economic growth rate of 6 percent for the fiscal year that began in mid-July.
"Agriculture and other sectors have been affected due to the late monsoon for paddy plantation and the subsequent heavy rainfall that triggered floods and landslides," the Nepal Rastra Bank (NRB) said, while releasing the first quarterly review of the monetary policy for the current fiscal year. "Overall, preliminary estimates indicate that economic growth in the current fiscal year will be slightly lower than the target."
The central bank, however, stopped short of projecting a specific economic growth figure for the year. In early November, the World Bank projected that Nepal's economic growth would slow significantly to 2.1 percent in the current fiscal year, reflecting the impact of public unrest in September and the resulting political instability.
The NRB also revised its inflation projection, lowering it to 4 percent from the earlier estimate of 5 percent. It noted that lower-than-targeted inflation in India and further reductions in international petroleum prices are expected to help bring down inflation in Nepal. In mid-October, Nepal's inflation fell to 1.67 percent.
"But reduced production of paddy and other monsoon crops, along with election-related spending, may exert some inflationary pressure," the NRB said. "As a result, average consumer inflation in fiscal year 2025-26 is projected to remain around 4 percent." ■