Kathmandu, Feb 27 (IANS): Nepal's economy grew at 0.8 per cent during the first quarter of the current 2022-23 fiscal year which began in mid-July 2022, the lowest year-on-year growth in the past seven years, the National Statistics Office (NSO) has reported.

The country logged a growth of 3 per cent over the same period of the 2021-22 fiscal year and has targeted an 8-per cent growth for the current fiscal year, Xinhua news agency reported.

Nepal had witnessed negative growth in five sectors: construction, mining and quarrying, wholesale and retail and repair of motor vehicles, transportation and storage and education, according to the NSO figures.

The combined contribution of the five sectors to the economy stood at 37.2 per cent in the last fiscal year, the NSO said.

Mining and quarrying and the construction industry had suffered the most, as they reported 29.2 per cent and 24 per cent in negative growth respectively.

"The main reason behind the slump in the construction sector is the lack of cash flow in the entire supply chain of the sector," Rabi Singh, president of the Federation of Contractors' Associations of Nepal, told the news agency.

"The government has not been able to make payment for construction works completed with its revenues declining, while the private sector has suffered from a resources crunch with the banks not being able to provide loans as they are facing liquidity crunch in the last one and half years," added Singh.

The overall demand for goods slumped by 28.28 per cent during the first quarter of the current fiscal year, the Confederation of Nepalese Industries said in a report in December 2022.