Aid shortfall deepens pressure on public finance
Summary
Nepal has received only 39% of its targeted foreign aid for fiscal year 2025/26, leading to pressure on public finances and delays in development projects.
Key Points
- Nepal received Rs 20.91 billion in foreign aid, only 39% of the Rs 53.44 billion target for fiscal year 2025/26.
- Foreign aid shortfall is due to implementation delays, weak project execution, and slower disbursement from development partners.
- Total foreign assistance declined by about 15.4% compared to the previous fiscal year, with Rs 63.14 billion received in total.
- Government is increasing domestic borrowing and working to improve coordination with development partners to accelerate aid utilisation.