The World Bank has projected that Nepal’s economic growth rate for the current fiscal year 2082/83 will be limited to just 2.3 percent. David Sis, Director of the World Bank, cited the ongoing conflict in the Middle East and the protests in Bhadra as negative factors impacting Nepal’s economy. He suggested that Nepal should prioritize improving the business environment, infrastructure development, and agriculture.
Kathmandu, 25 Chaitra – The World Bank Nepal Office released its semi-annual forecast titled “Nepal Development Update April 2026,” outlining these projections. The decline in agricultural output and the continuing conflict in the Gulf countries have affected Nepal’s economic performance. However, with the formation of a new government and ongoing economic reforms, improvements are expected in the future.
Last year, Nepal’s economic growth rate stood at 4.6 percent. Considering reconstruction efforts, hydroelectric expansion, and local and provincial elections, the growth rate for the upcoming fiscal year is forecasted to reach up to 4.4 percent. According to data released by the Central Bureau of Statistics on Monday, the economy grew by 4.05 percent in the second quarter of the current fiscal year. The government has set an ambitious growth target of 6.5 percent for this fiscal year.
According to the ‘Nepal Development Update’ unveiled at today’s press conference by the World Bank, the service sector is expected to be the most affected in 2026. Particularly, issues in the tourism sector, increased transportation costs, and disruptions in supply chains are anticipated to pressure the economy. The report highlighted that if the Middle East conflict prolongs, it could lead to reduced tourist arrivals, lower remittance inflows, and a slowdown of the economy. However, political stability and structural reforms could boost the confidence of private investors.
