KATHMANDU, Oct. 6 (Xinhua) -- The World Bank has projected Nepal's economic growth to slow to 3.7 percent in the current fiscal year 2026-27, which began in mid-July, from its earlier projection of 4.2 percent, reflecting disruptions to industry and services.
Releasing its flagship publication on Nepal, Nepal Development Update: Building Back Differently for the Future, on Tuesday, the global development institution said the Aug. 26 floods in Nepal are expected to have a material negative impact on the country's economic prospects in the short term.
A total of 1,455 people have been confirmed dead and 5,285 remain missing to date following the disaster, which devastated communities and infrastructure along the Bhotekoshi and Trishuli river corridors, according to the National Disaster Risk Reduction and Management Authority (NDRRMA).
According to the Rapid Disaster Needs Assessment (RDNA) report prepared by a joint technical team of the National Planning Commission and the NDRRMA, the recent floods and landslides are estimated to have caused losses of 2.69 billion U.S. dollars.
The RDNA report said an estimated 4.77 billion dollars will be required for the reconstruction and recovery of affected infrastructure and assets.
The World Bank said industry is expected to be the main drag on growth, reflecting extensive damage to hydropower, solar energy, electricity transmission and transport infrastructure, which will constrain electricity generation and production and disrupt the movement of goods.
"Services are expected to be affected through disruptions to trade, transport, tourism, and financial activity, while agricultural losses are expected to have limited effects on aggregate output but significant impacts on livelihoods in affected areas," the bank said in its report.
Besides the impact of the floods, other key downside risks include a prolonged conflict in the Middle East, which could reduce tourist arrivals and remittance inflows, dampen consumption and services activity, and slow overall growth.
"Disruptions in fertilizer imports could raise production costs and reduce agricultural output, while fuel supply constraints could weigh on investment and economic activity more broadly," the global development lender said. "The risks to the outlook are tilted to the downside."
Domestically, the main risks include delays in relief, reconstruction and restoration of infrastructure damaged by the August floods, according to the World Bank.
"This could prolong disruptions to transport, trade, tourism, hydropower generation, and private sector activity," it said. ■