Kathmandu, Oct 2 (IANS): The World Bank on Wednesday projected a growth of 5.1 per cent for Nepal in the current 2024-25 fiscal year starting in mid-July, below the Nepali government's 6 per cent target.

Growing tourist arrivals, more hydropower generation and expected growth in paddy production shall contribute more to Nepal's gross domestic product, the bank said in its Nepal Development Update report.

The South Asian country achieved a growth of 3.9 per cent in 2023-24, noted the international financial institution.

The bank is expecting Nepal's private sector to contribute more to its growth by taking advantage of the central bank's loosening of monetary policies and easing of regulatory requirements, Xinhua news agency reported.

It has projected Nepal's economy to grow by 5.5 per cent in the next fiscal year.

In its report released last week, the Asian Development Bank forecast a 4.9-percent growth for Nepal in 2024-25.

"Maintaining growth momentum is key to Nepal's development," said David Sislen, the World Bank's Country Director for the Maldives, Nepal and Sri Lanka.

"This requires continued reform in critical areas such as infrastructure, governance, human capital development and developing an environment which encourages and supports the private sector," Sislen was quoted as saying in a statement.