World Bank projects Nepal's growth to slow to 2.3% in FY26, cites Middle East conflict and domestic unrest
Summary
The World Bank projects Nepal's economic growth to slow to 2.3% in FY26 due to the Middle East conflict and domestic unrest, with recovery expected by FY27 supported by reconstruction and hydropower expansion.
Key Points
- Nepal's economic growth is projected to slow sharply to 2.3% in FY26 from 4.6% in FY25.
- The slowdown is attributed to the Middle East conflict and domestic unrest in September 2025.
- Recovery to an average of 4.4% growth is expected over FY27–FY28, supported by reconstruction, hydropower expansion, and electoral consumption.
- Improved political stability and structural reforms could bolster investor confidence and accelerate recovery.
