A woman is seen at a bead shop during the Hindu holy month of Shrawan in Kathmandu, Nepal, July 28, 2023. (Photo by Sulav Shrestha/Xinhua)

The World Bank on Wednesday projected a growth of 5.1 percent for Nepal in the current 2024-25 fiscal year starting in mid-July, below the Nepali government's 6 percent 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 percent 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.

It has projected Nepal's economy to grow by 5.5 percent 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.