Nepal

Nepal Economic Profile

Nepal is a lower-middle-income country in the South Asian region with a population of approximately 30 million. Its economic size (GDP) is approximately $40 billion, making it a relatively small economy within South Asia. Agriculture is the principal industry, accounting for approximately 27% of GDP, with approximately 65% of the rural population engaged in it. Tourism is the next important industry, with over 1 million international tourists annually visiting for Himalayan mountaineering and trekking, serving as a source of foreign currency. Additionally, the economy is supported by garment manufacturing, hydroelectric power generation, and remittances from overseas workers.

Regarding recent economic trends, average annual growth rates have been in the 4-5% range, demonstrating relatively stable growth. From 2023 to 2024, financial stabilization is being pursued alongside easing inflation pressures. However, post-earthquake recovery from the 2015 major earthquake remains incomplete in some regions, making infrastructure development and economic recovery ongoing issues. Digitalization and fintech industry development are also beginning, with the number of startups particularly increasing in urban areas such as Kathmandu.

Notable points to consider include, first, severe power shortages. Power supply for economic development is insufficient, making hydroelectric power development and expansion of electrical infrastructure urgent. Second, remittances from overseas workers account for approximately 25-30% of GDP, representing extremely high dependence. Additionally, high unemployment rates and youth emigration are issues. Meanwhile, given the geopolitical positioning between India and China, optimization of economic relations with both countries is an important strategic consideration.