Answer:
Nepal’s economy faced headwinds in the first half of FY2020. Following three consecutive years of substantial economic expansion, with growth averaging 7.3 percent per year, Nepal’s economy experienced headwinds in the agriculture, manufacturing, and the service sectors in the first half of FY2020. The agriculture sector was impacted by a delayed monsoon coupled with an outbreak of armyworms, leading to a 1.7 percent (year-on-year) decline in paddy production. In the manufacturing sector, tightening domestic credit conditions, an increased foreign direct investment threshold, and continued low execution rates of public investment projects resulted in a contraction of investment and the number of new businesses registered.
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