Nepal’s economic growth is projected to decline sharply to 2.1 percent in FY26, down from 4.6 percent in FY25, according to the World Bank’s latest Nepal Development Update, released today. The slowdown reflects the aftermath of the September 2025 public unrest, political uncertainty, and weakened investor confidence. Despite the downturn, reconstruction efforts are expected to support a rebound to 4.7 percent in FY27, though the overall outlook remains fragile and highly uncertain.

The report — Nepal Development Update: Reforms to Accelerate Public Investment — highlights that Nepal’s services sector, which accounts for more than half of the country’s GDP, is expected to be the most adversely affected. Tourism, trade, transport, and hospitality have seen significant disruption followin

See Full Page