ADB has released the latest Macroeconomic Update for Nepal (August 2014). This issue reviews and analyzes the macroeconomic updates on real, fiscal, monetary, and external sectors. As a result of the bumper agricultural harvest, moderate recovery in construction, and robust services activities backed by high remittance income, gross domestic product (GDP) grew by an estimated 5.2% in FY2014, up from 3.5% in FY2013. The major contribution to overall GDP growth came from the services sector, which grew at an estimated 6.1%, the highest in the last 6 years, on the back of the rise in remittance-induced consumption demand.

It explores the mainstreaming of environment for economic growth and poverty reduction. Currently, one of the major challenges faced by Nepal is to ensure not only a high and inclusive economic growth, but also to make it environment-friendly. Thus far, since growth is largely driven by exogenous factors such as monsoon-fed agriculture production and remittances-induced services sector growth, economic activities have been at best minimally damaging to the environment.