Nepal: Fourth Review Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Nepal

Subdued economic activity has helped strengthen the external position and ease inflation. Growth is expected to rebound to 4.9 percent in FY2024/25, supported by further expansion in hydropower generation and a higher execution rate of public capital expenditure. Inflation is expected to remain within the authorities’ target ceiling of 5.5 percent. Non-performing loans have risen, bank profitability has weakened, and the financial health of savings and credit cooperatives (SACCOs) has deteriorated.