Kathmandu [Nepal], October 7 – The World Bank has projected Nepal’s economic growth to slow to 3.7 percent in fiscal year 2026-27 citing disruptions to industry and services caused by the Bhotekoshi flood on August 26.
The forecast is below the 3.9 percent growth estimated for FY2025-26 and 4.4 percent recorded in FY2024-25, according to the World Bank’s Nepal Development Update: Building Back Differently for the Future, released Tuesday.
The bank said extensive damage to hydropower, solar energy, electricity transmission and transport infrastructure would constrain electricity generation, production and the movement of goods.
Services are also expected to face disruptions to trade, transport, tourism and financial activity while agricultural losses are likely to significantly affect livelihoods in affected areas.
However, reconstruction and rehabilitation could help lift growth to 5.2 percent in FY2027-28. The pace of recovery will depend on the speed and scale of reconstruction, the World Bank said.
It urged updated multi-hazard risk assessments, stronger early-warning systems and greater resilience in critical transport, energy and communication networks.
The bank also highlighted AI’s potential to boost productivity, exports and public services across South Asia.
