WB projects Nepal’s growth to slow following devastating Rasuwa flood

Kathmandu, Oct 6: Growth in Nepal is projected to slow to 3.7% in 2027 following disruptions to industry and services caused by the August 26 flood, according to the World Bank’s latest development update.     

Reconstruction and rehabilitation activities are expected to begin supporting economic activity, supporting a recovery in growth to 5.2 percent in fiscal year 2028.     

Released today, the 'Nepal Development Update: Building Back Differently for the Future' says that industry is expected to be the primary drag on growth, reflecting extensive damage to hydropower, solar energy, electricity transmission, and transport infrastructure, which will constrain electricity generation, production, and the movement of goods.     

 Services are expected to be affected through disruptions to trade, transport, tourism, and financial activity. Agricultural losses, while limited in the effects on aggregate output, are expected to have significant impacts on livelihoods in affected areas.     

"The Rasuwa flood has caused devastating human and economic losses. This is a moment of opportunity for Nepal to think about its infrastructure — connectivity, energy, and basic services like water and sanitation and health and education — and ensure that resilience and redundancy are central to its planning and investment, especially in the context of a changing climate and an evolving set of risks. The World Bank stands ready to assist the authorities in investing in systems and implementing the right policies to help put Nepal on a more resilient and sustainable development path,” the World Bank said.