The economic growth of Gandaki, Lumbini, and Bagmati provinces in this fiscal, according to NSO, is projected to surpass the national average.

 NewBiz Report

In fiscal year 2023/24, the economies of all seven provinces are projected to surpass the growth witnessed in the previous fiscal year. The National Statistics Office (NSO) has forecasted improved economic growth for all provinces compared to the preceding fiscal year.

Gandaki Province is set to achieve the highest economic growth rate among the seven provinces. According to the NSO, the provincial economy is projected to expand by 4.55% in the current fiscal year that ends in mid-July. Conversely, Karnali Province is anticipated to report the slowest growth of 3.39%. Bagamati province, where Nepal’s federal capital and financial hub Kathmandu is located, is expected to grow by 3.96%. Gandaki had outpaced the economic growth rate of other provinces in the previous fiscal year as well.

The economic growth of Gandaki, Lumbini, and Bagamati provinces in this fiscal, according to NSO, is projected to surpass the national average. The NSO has forecast Nepal's growth at 3.87% this fiscal year, banking on trade revival and a flourishing tourism sector. Nepal's gross domestic product (GDP) is expected to reach Rs 5,705 billion by mid-July. According to the NSO, Bagamati Province accounts for the lion’s share of the country’s total GDP, with its contribution standing at 36.4%. The contribution of Koshi Province is expected to remain at 15.8% while that of Lumbini Province at 14.3%. The share of Madhesh Province is projected at 13.1%, Gandaki at 9.06%, Sudurpashchim at 7.1%, and Karnali at 4.3%.

Compared to the previous fiscal year, the contributions of Koshi, Madhesh, Karnali and Sudurpashchim to the national GDP have slightly decreased, while the contributions of other provinces have seen a marginal growth. This indicates that the income growth of citizens in Koshi, Madhesh, Karnali and Sudurpashchim provinces has not kept pace with the expansion of the country's economy.

The NSO earlier said that the accommodation and food services sector is projected to experience the highest growth rate of 21.84% nationally this year. This growth trend is anticipated across all provinces except Lumbini. In the Lumbini province, the energy sector is anticipated to post the highest growth rate. Conversely, Sudurpashchim and Koshi provinces exhibit the lowest growth rates in the industrial sector, while other provinces show the lowest growth rates in the construction sector. The construction sector shows negative growth rates across all provinces, while the manufacturing industry sector experiences negative growth rates in all provinces except Karnali. This negative growth trend is also expected at the national level for both sectors.

Bagamati Province Leads with Double Average Income

The average income of people in Bagamati Province is twice that of citizens in other provinces. According to the provincial GDP data, the average income of Bagamati Province residents is projected to reach Rs 332,000 in FY 2023/24. Conversely, residents of Madhesh are expected to have a per capita income of Rs 119,000 by the end of the current fiscal year.

The NSO report shows that Gandaki Province follows Bagamati Province in terms of per capita income. Gandaki's per capita income is forecast to reach Rs 196,000 in the current fiscal year. Meanwhile, Koshi Province's per capita income is estimated at Rs 179,000, and Lumbini Province's at Rs 155,000. The per capita income of Karnali and Sudurpashchim Province residents lags significantly behind that of Bagamati. Karnali Province's average per capita income is expected to reach Rs 143,000 this fiscal year, while that of Sudurpashchim is projected to reach Rs 149,000. Nepal grapples with significant regional economic disparities and developmental gaps. Bagamati Province, particularly Kathmandu, stands out as a hub of numerous economic activities. Following Bagamati, Gandaki and Koshi emerge as the next economically developed regions. Consequently, the per capita income in these areas tends to be relatively higher.

Agriculture mainstay of six provinces

The NSO data reveals that six out of seven provinces in Nepal heavily rely on agriculture for their economies. Provincial GDP estimates show that apart from Bagamati, agriculture makes the largest contribution to the economy in all other provinces. In Bagamati province's economy, the wholesale and retail trade sector stands out as the top contributor accounting for 21.53% of its economy. The agriculture sector is estimated to contribute 32.8% to Koshi Province’s GDP, making it the leading economic activity in the region. The agriculture sector claims the top spot as the primary contributor to Madhesh Province’s GDP as well, accounting for 35.19% of its total economy. 

Agriculture emerges as the primary sector contributing to Gandaki province’s GDP, accounting for 25.72%, while administrative and support service activities represent the smallest contribution at 0.31%. In Lumbini, the agriculture sector leads with the highest contribution to its GDP with 29.63%, whereas administrative and support service activities make the smallest contribution at 0.34%. In Karnali, agriculture constitutes the most substantial share, contributing 29.51% to its GDP. Similarly, in Sudurpashchim Province, the agriculture sector holds the top position, contributing 33% to its GDP. 

Koshi Province

The GDP of Koshi Province is estimated to be about Rs 903 billion for 2023/24, up from the revised estimate of Rs 849 billion in 2022/23. The province's contribution to the national GDP is expected to be 15.84%, slightly lower than the revised estimate of 15.88% for the previous fiscal year. 

In 2023/24, the agriculture sector is projected to contribute the highest at 32.80% to the province's total GDP, while the administrative support service sector is expected to contribute the lowest at 0.32%. In 2022/23, the agriculture sector led with 32.68% contribution, and the administrative support service sector had the lowest contribution at 0.31%.

Madhesh Province

Madhesh Province's GDP is estimated to reach approximately Rs 748 billion in the current fiscal year, up from the previous fiscal’s revised estimate of Rs 703 billion. The province is expected to contribute 13.12% to the national GDP this year, slightly lower than the revised estimate of 13.14% of the preceding fiscal year.

The agriculture sector leads with the highest contribution (35.19%) to Madhesh province's total GDP, while the mining and quarrying sector registers the lowest contribution (0.15%). In contrast, the agricultural sector held the top position (34.81%), with the mining and quarrying sector ranking last (0.16%) in the previous fiscal year.

Bagamati Province

The GDP of Bagamati Province is expected to expand to approximately Rs 2,075 billion in the current fiscal year, marking an increase from the revised estimate of Rs 1,938 billion in 2022/23. It is forecast that this province will account for 36.36% of the national GDP in 2023/24, slightly surpassing the revised estimate of 36.22% in the previous fiscal year. In 2023/24, the wholesale and retail trade sector is expected to make the highest contribution (21.53%) to Bagamati Province's GDP, while the water supply and waste management sector is anticipated to contribute the lowest (0.28%).

Gandaki Province

Gandaki Province's GDP for 2023/24 is projected to reach Rs 517 billion, up from the revised estimate of Rs 484 billion in the previous fiscal year. The NSO anticipates the province to contribute 9.06% to the national GDP in 2023/24, mirroring its contribution from the last fiscal year. In 2023/24, the agricultural sector is expected to make the highest contribution (25.72%) to the provincial GDP, while the administrative support service sector is forecast to contribute the lowest (0.31%).

Lumbini Province

The GDP of Lumbini Province at consumer prices is estimated to be Rs 814 billion for the fiscal year 2023/24, up from the revised estimate of Rs 764 billion in the previous fiscal year. It is projected that this province will contribute 14.26% to the national gross domestic product, slightly lower than the revised estimate of 14.29% in the previous fiscal year. The NSO projects that in 2023/24, the agriculture sector will make the highest contribution (29.63%) to Lumbini Province's GDP, while the administrative support services sector will contribute the lowest (0.34%).

Karnali Province

Karnali Province's GDP is estimated to reach Rs 244 billion in 2023/24, showing an increase from the revised estimate of Rs 229 billion in FY 2022/23. The NSO has projected that the province will contribute 4.28% to the national GDP in the current fiscal year, which remains unchanged from the last fiscal year. According to the NSO, the agriculture sector will make the highest contribution (29.51%) to the GDP of Karnali Province in 2023/24, while the administrative support services sector will contribute the lowest (0.17%).

Sudurpashchim Province

Sudurpashchim Province's GDP, as per the NSO, is expected to reach Rs 404 billion in the current fiscal year, up from Rs 381 billion in the last fiscal year. It is projected that this province will contribute 7.09% to the national GDP in the current fiscal year, slightly lower than its contribution of 7.13% in 2022/23. According to NSO data, the agriculture sector will make the highest contribution (33.00%) to Sudurpashchim Province's GDP in 2023/24, while the administrative support service sector will contribute the lowest (0.13%).