Energy Sector Drives Nepal's Economy with 24.88% Growth in Third Quarter

KATHMANDU; Nepal's economy is estimated to have expanded by 3.51 percent in the third quarter of the current fiscal year, with the electricity and gas sector emerging as the fastest-growing segment of the economy, according to the National Statistics Office (NSO).

The NSO's latest quarterly estimates show that the country's economy grew by less than five percent at constant prices during the period between mid-July 2025 and mid-April 2026. While most sectors recorded modest growth, the energy sector posted an impressive 24.88 percent expansion, making it the largest contributor to overall economic growth during the review period.

The latest estimates suggest that robust growth in the energy sector has played a pivotal role in supporting Nepal's economic expansion, offsetting weaker performances in several traditional sectors.

The NSO report attributes the economy's moderate growth to strong performances in electricity and gas, banking and insurance, transport and storage, and wholesale and retail trade. However, slower growth in agriculture, construction, and manufacturing weighed on the overall pace of economic expansion.

Among the 18 industrial classifications, 16 sectors recorded positive gross value added (GVA) growth compared to the same period last fiscal year. Following the electricity and gas sector, banking and insurance grew by 10.27 percent, while transport and storage expanded by 7.83 percent.

In contrast, the manufacturing sector contracted by 0.54 percent, and public administration and defense declined by 1.59 percent, making them the only sectors to register negative growth.

Despite remaining the largest contributor to Nepal's economy, the agriculture sector is estimated to have grown by only 1.58 percent. Overall, the broader agriculture, forestry and fisheries sector is projected to record a marginal contraction of 0.04 percent during the review period.

According to the NSO, Nepal's economy is estimated to have reached Rs 6.465 trillion by mid-April 2026, up from Rs 6.427 trillion recorded in mid-January.