Nepal growth outlook dims as global lenders cut projections below 3 percent
Summary
Nepal's economy faces a slowdown due to drought, political unrest, natural disasters, and geopolitical tensions. Growth projections for fiscal year 2025-26 are revised down to around 2.3-2.7%, with tourism and investment particularly impacted.
Key Points
- Nepal's economic growth projection for FY 2025-26 is downgraded to 2.3-2.7% by the World Bank and ADB, down from 4.6% previously.
- Political unrest in September 2025 and severe floods have damaged infrastructure, investor confidence, and supply chains.
- Escalating geopolitical tensions in West Asia disrupt tourism and remittance inflows, notably through cancelled flights affecting peak trekking season.
- Government reforms aim to modernize tourism by streamlining regulations and promoting sustainable development, amid structural challenges and the need for infrastructure upgrades.
