Kathmandu: The Asian Development Bank (ADB) has projected Nepal’s economy to grow by 3.9 percent.
GDP growth is forecast to increase to 3.9 percent in FY 2022 as the economy further normalizes on increasing Covid-19 vaccine coverage, setting a path to steadily higher growth, ADB said in Asian Development Outlook (ADO) 2022.
Growth over the forecast horizon will be supported by accommodative macroeconomic policies even though the recovery in tourism will be delayed by slowing growth in advanced economies, reads the report.
Fiscal and monetary stimulus and eased Covid-19 lockdowns enabled the economy to rebound in fiscal 2021, the report stated, adding that a second wave of infections in the fourth quarter dampened economic activity.
Growth will recover further in fiscal 2022 and 2023, underpinned by continued fiscal stimulus and wider vaccination coverage, reads the report.
The ADB projected that inflation will rise on high global oil prices and the current account deficit will widen further on rebounding investment.