Nepal's real GDP will grow by 4.4 percent , IMF projects

Nepal's real GDP will grow by 4.4 percent in the current fiscal year 2022-23 on the backing of the ongoing recovery of tourism, strong agriculture sector performance, and resilient remittances, according to the latest projection of the International Monetary Fund (IMF).

 Likewise, inflation is estimated to decline to seven percent by the end of this fiscal, while the overall fiscal deficit may reach 4.5 percent of GDP in the fiscal year 2022-23.

 "The revenue collection is discouraging owing largely to lower import-related taxes. However, the substantial expenditure rationalisation announced in the mid-year budget review could well help contain the deficit, the IMF states.

The current account deficit is also expected to narrow to 5.2 percent of GDP in fiscal 2022-23 due to weaker import demand, lower commodity prices, a recovery in tourism, and buoyant remittances that reflect a post-pandemic increase in outward migration.

 The IMF executive board meeting held on May 1 had completed the first and second reviews of the extended credit facility (ECF) allowing the Nepali authorities to withdraw the second disbursement of $52.8 million for budget support. The economic programme supported by the ECF is said to be focused on preserving macroeconomic and financial stability as well as fostering sustainable and inclusive growth over the medium term.