Kathmandu. The Asian Development Bank (ADB) has released a forecast that Nepal's economic growth rate will decrease to 4.1 percent in 2023 and inflation will reach 7.4 percent. ADB has released this projection through the "Asian Development Outlook, April 2023" report.

The economic growth rate of Nepal, which is estimated at 5.8 percent in 2022, is projected to decline further this year. "The effect of tight monetary policy, declining domestic market demand, inadequate covid epidemic recovery programs and global problems will be seen in the growth rate of Nepal's gross domestic product", ADB said.

According to ADB, the direct impact of the global economic recession can be seen on Nepal's tourism sector and remittance flow. Similarly, the inability to increase capital expenditure, lack of result-oriented investment plans, problems in financial management and the time taken for preparatory work for project implementation have been shown as the reasons for the low economic growth rate.

ADB estimates that the growth rate of agriculture, service, and industry sectors, which contribute more to Nepal's economy, will decline this year. "In 2022, the growth rate of Nepal's agricultural sector, which is estimated at 2.3 percent, will decrease to 2 percent this year. Likewise, the service sector is projected to remain at 4.4 percent", the ADB report said. In 2022, the growth rate of the service sector is estimated at 5.9 percent, but this year it is projected to decrease by 1.5 percent. ADB estimates that the growth rate of the industrial sector will slow down due to high interest rates, policy of import ban on some goods, decline in domestic consumption and consumption of foreign goods.

Likewise, the growth rate of the real estate business and the contribution of the retail sector to the economy is also expected to decrease. ADB estimates that Nepal will have to face a high price increase in 2023. This year, the price increase is expected to reach 7.4 percent. In 2022, the price increase in Nepal was estimated to be 6.3 percent.

But next year i.e. in 2024, it is estimated that Nepal's inflation will come under some control and remain at 6.2 percent. Likewise, it is estimated that the government's current account deficit will decrease by four percent this year.

ADB has estimated that the average economic growth rate of Asian countries in 2023 will be 4.8 percent and the average inflation rate will be 4.2 percent. Just some time ago, the World Bank published the 'Global Economic Prospect' report and said that the world economic growth rate will decrease to 1.7 percent in 2023. The report predicted that Nepal's economic growth rate would be 5.1 percent in fiscal year 2022/23 and 4.9 percent in 2023/24.