Key Trends in Nepal -2023

Key Trends - Nepal 2025

Factors shaping economy of Nepal

CA Bijay Kumar Agrawal
Key Trends in Nepal -2023
Foreword

In 2025, Nepal is expected to witness an economic growth of 4.5%, primarily fueled by the services sector and rising domestic trade, despite setbacks from recent natural disasters. The country is experiencing a surge in digital transformation, resulting in strong demand for IT professionals and attracting numerous startups and foreign firms outsourcing their operations to Nepal. Tourism, hospitality, and the IT sector continue to be key areas drawing foreign direct investment. Meanwhile, the government is prioritizing infrastructure upgrades, restructuring public institutions, and enhancing the efficiency of capital spending.

Economic Outlook:
Nepal’s GDP is projected to expand by 4.5% in FY 2024/25, compared to 3.9% in the previous fiscal year.

Growth Drivers:
The services sector is expected to lead the growth, supported by a rebound in merchandise imports and increased domestic commerce.

Hydropower & Agriculture:
Growth will also be supported by higher hydropower output and improved paddy production.

Future Projections:
The economy is forecasted to grow at an average rate of 5.4% annually in FY 2025/26 and FY 2026/27.