Kathmandu. The World Bank has projected that Nepal’s economic growth rate will be limited to 3.7 percent in the current fiscal year 2026-27. The World Bank has projected that Nepal’s economic growth rate will be limited to 3.7 percent in the current fiscal year 2026-27 due to the impact of the devastating floods in Rasuwa in the industry and service sector. <\/p>\n
The World Bank estimates that economic activity will improve as post-flood reconstruction and rehabilitation activities increase and the growth rate will reach 5.2 percent in the next fiscal year 2027-28. The World Bank released the report ‘Nepal Development Update: Building Back Differently for the Future’ report released on Tuesday said that the industrial sector will be the most affected by the floods. According to the report, the industrial sector will be the main obstacle to economic growth as the damage to hydropower, solar energy, electricity transmission and transport infrastructure will affect power generation, industrial activities and movement of goods. <\/p>\n
The World Bank estimates that the service sector will also be affected by the disruption of trade, transport, tourism and financial activities. Although the impact of the damage in the agricultural sector on the overall economic growth is relatively limited, the impact on the livelihoods of people in the affected areas will be significantly affected, according to the report. David Sislen, Division Director of the World Bank for the Maldives, Nepal and Sri Lanka, said that the huge human and economic damage caused by the floods should be taken as an opportunity for Nepal to rethink its infrastructure development framework. <\/p>\n
“This is an opportunity for Nepal to rethink its basic services such as connectivity, energy and water, sanitation, health and education, and take into account the changing climate and risk profiles, and focus on resilience and alternative capacities in infrastructure planning and investment,” he said. \u2019<\/p>\n
The World Bank has suggested that the damaged structures should be rebuilt in a new way keeping in mind the risks rather than rebuilding the damaged structures as they are. The report states that during the reconstruction, there should be a new assessment of multi-disaster risk, a review of the location and design of infrastructure, and alternative capacity in important networks of transport, energy and communications. <\/p>\n
Similarly, the World Bank has suggested that the disaster early warning system should be strengthened and an integrated social protection system should be developed so that immediate relief can be provided to the families at risk. According to the World Bank, post-flood reconstruction activities can become a new basis for economic growth. But for this, infrastructure reconstruction should be linked to the risk of floods, landslides, glacial lake explosions and other disasters in the future. <\/p>\n
South Asia grows by 6.9 percent<\/strong><\/p>\n }<\/p>\n The South Asia Economic Update, released alongside the development update on Nepal, has projected South Asia’s economic growth rate to be 6.9 percent in 2026. The World Bank estimates that the regional economy will remain resilient despite global economic risks due to strong domestic demand. <\/p>\n In 2027, South Asia’s economic growth rate is projected to decline to 6.7 percent. The report points to the use of artificial intelligence (AI) as a significant opportunity for South Asia’s upcoming economic growth. Although the use of AI is still low in South Asia compared to developed economies, its use is growing rapidly, according to the World Bank. <\/p>\n “AI has the potential to improve labour productivity, expand export opportunities, and improve public service delivery,” said Franziska Onsorge, World Bank Group’s Asia chief economist for Asia. <\/p>\n But for this, the World Bank suggests that barriers to the use of AI in small businesses should be removed along with skilled manpower development, business-friendly environment, physical and digital infrastructure improvements. In addition, the report says that there should be a clear regulatory framework to encourage local AI innovation and ensure data security and privacy. <\/p>\n\n","protected":false},"excerpt":{"rendered":" Kathmandu. The World Bank has projected that Nepal’s economic growth rate will be limited to 3.7 percent in the current fiscal year 2026-27. The World Bank has projected that Nepal’s economic growth rate will be limited to 3.7 percent in the current fiscal year 2026-27 due to the impact of the devastating floods in Rasuwa […]<\/p>\n","protected":false},"author":1,"featured_media":40216,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[123,126,129,147],"tags":[],"class_list":["post-40220","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-update-en","category-banking-news-en","category-special-en","category-news-en"],"acf":[],"jetpack_featured_media_url":"https:\/\/bankingsansar.com\/wp-content\/uploads\/2026\/10\/world-bank.jpg","publishedDateNp":"\u0968\u0966 \u0906\u0936\u094d\u0935\u093f\u0928 \u0968\u0966\u096e\u0969, \u092e\u0902\u0917\u0932\u0935\u093e\u0930 \u0967\u096a:\u0969\u096e","_links":{"self":[{"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/posts\/40220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/comments?post=40220"}],"version-history":[{"count":1,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/posts\/40220\/revisions"}],"predecessor-version":[{"id":40221,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/posts\/40220\/revisions\/40221"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/media\/40216"}],"wp:attachment":[{"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/media?parent=40220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/categories?post=40220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bankingsansar.com\/bs_api\/wp\/v2\/tags?post=40220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}