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Recent projections by the World Bank (WB) and second-quarter estimates from the National Statistics Office (NSO) suggest that Nepal’s economy is expanding at a moderate pace and under increasingly complex external and domestic conditions.

The World Bank has projected a slowdown in Nepal’s economic growth in fiscal year 2025/26 to 2.3 percent compared to the 4.6 percent expansion recorded in the previous fiscal year. This anticipated deceleration is due to a combination of external shocks and lingering internal disruptions. According to the World Bank, the ongoing conflict in West Asia has introduced volatility in global energy markets and disrupted travel flows, both of which are critical for Nepal’s tourism-dependent services sector. At the same time, the aftereffects of the Sept 2025 unrest continue to dampen investor sentiment and delay economic normalization.

However, the NSO’s second-quarter data tells a more nuanced story. The economy expanded by 4.05 percent year-on-year based on seasonally unadjusted data at basic prices, indicating that growth has not stalled. However, the quarter-on-quarter growth is projected to remain at just 2.04 percent based on seasonally adjusted prices. Projections by the World Bank and the NSO suggest that although Nepal’s growth is holding up statistically, momentum is weakening. 

Encouragingly, all 18 economic sectors recorded positive year-on-year growth in the second quarter, according to the NSO. This broad-based expansion suggests that the recovery is not narrowly concentrated but spread across the economy. 

Some sectors have performed exceptionally well. Electricity and gas activities recorded the highest growth at 22.74 percent, followed by financial and insurance activities (12.51 percent), transport and storage (9.65 percent), accommodation and food services (5.18 percent), and wholesale and retail trade (4.11 percent). Agriculture, the largest contributor to the economy, grew by an estimated 2.21 percent year-on-year despite a decline in paddy output. Increases in cash crops, vegetables, fruits, and forestry products supported overall agricultural value addition, according to NSO.

Similarly, wholesale and retail trade, the second-largest sector, expanded by 4.11 percent due to higher domestic production and imports of tradable goods. In contrast, sectors such as water supply, sewerage and waste management (0.55 percent), public administration and defense (1.11 percent), and education (1.16 percent) posted relatively weak growth.

Several sectors have shown signs of stagnation. Water supply and waste management, public administration, and education all recorded growth rates barely above one percent. This reflects structural inefficiencies in public service delivery and human capital development which are crucial for sustaining long-term growth.

The World Bank has warned that the services sector, particularly tourism, could face headwinds if the West Asia conflict persists. A prolonged crisis could reduce tourist arrivals, weaken remittance inflows from Nepali workers in the region, and ultimately dampen domestic consumption. Higher transport costs and supply chain disruptions could further erode competitiveness and raise inflationary pressures, it added.

However, there are also reasons for cautious optimism. The political landscape appears more stable following the March elections when Rastriya Swatantra Party (RSP) emerged as the largest political force in the country with nearly two-thirds majority. This alone can improve policy continuity and investor confidence. Since the country’s macroeconomic fundamentals are relatively sound, with adequate foreign exchange reserves and manageable inflation, these buffers can help the economy navigate external shocks if managed effectively.

More importantly, the medium-term outlook remains positive. The World Bank expects growth to pick up to an average of 4.4 percent over the next two fiscal years, driven by reconstruction activities, continued hydropower expansion, and consumption linked to the 2027 subnational elections. 

The World Bank has recommended improving the business environment, investing in foundational infrastructure, mobilizing private finance, and supporting high-potential sectors such as tourism, information technology, and agribusiness. Without these structural reforms, it says Nepal risks remaining trapped in a low-growth equilibrium.

Among its South Asian peers, Nepal’s projected growth outpaces only that of the Maldives. India is expected to grow at 7.6 percent in the current fiscal year, while growth in Bangladesh, Bhutan, Sri Lanka, Pakistan, and the Maldives is projected at 7.1 percent, 3.9 percent, 3.6 percent, 3.0 percent, and 0.7 percent, respectively.

The AG 10 Football Academy has officially commenced its 11-day football camp at the Chyasal Stadium in Lalitpur, starting last Monday. Organized by former national team captain and academy head Anil Gurung, the program features 35 participants between the ages of 6 and 16. 

The camp, which is scheduled to run until May 16, holds daily training sessions from 8:00 am to 10:00 am. According to the organizers, the initiative is designed to enhance technical skills, physical fitness, and tactical understanding while fostering discipline and teamwork in an engaging environment. 

To ensure high-quality instruction, the academy has enlisted a veteran coaching staff including former national women’s team coach Rajendra Tamang, national team goalkeeper coach Binod Dangol, and Anil Gurung, alongside coaches Samir Bista and Subit Karki.

The new travel memoir ‘Jaganmukti’, authored by veteran journalist Dharmendra Jha, was officially released during the Baglung Media Mela-2082. The book was inaugurated by the Chief Minister of Gandaki Province, Surendra Raj Pandey, at a special ceremony organized by the Federation of Nepali Journalists (FNJ) Baglung Chapter. Known in the literary world as ‘Dharmendra Bihwal,’ Jha chronicles his spiritual and cultural journey from the sacred heights of Muktinath in Mustang to the coastal Jagannath temple, aiming to bridge the cultural and religious ties between Nepal and India.

According to the author, this 102-page travelogue marks the first book written in the Maithili language regarding Muktinath. Jha expressed confidence that the work will serve as a vital guide for Maithili speakers, noting that the Shaligram stones worshipped in Mithila households originate from the Muktinath region. The book is structured into three sections: the first focusing on Muktinath across the Himalayas, the second on Jagannath by the sea, and the third detailing his experiences at the Mahakumbh and the Kali river.

Dharmendra Jha brings a wealth of experience to this publication, having served as the former Central President of the Federation of Nepali Journalists and the immediate past Executive Chair of the National News Agency (RSS). A prolific writer with numerous titles in poetry, drama, and journalism history, Jha has also held leadership roles in the International Federation of Journalists (IFJ) and the Nepal Press Union. This latest work adds to his extensive literary portfolio, which includes titles such as Mithila Mithak and The History of Nepalese Maithili Print Journalism.

Official development assistance (ODA) disbursements expanded by 15.5 percent to reach $1.6bn in the fiscal year 2024/25, according to the Development Cooperation Report 2024/25 unveiled by the Ministry of Finance earlier this week. Such disbursements stood at $1.39bn in the previous fiscal year.

According to the report, disbursement in 2024/25 is also significantly higher than the ten-year average, indicating a normalization of development finance flows following recent fluctuations. During the review period, the government signed 33 ODA agreements with 12 development partners, amounting to a total commitment of $1.98bn. Of this, debt financing accounted for $1.57bn, or 79.1 percent, while grants made up the remaining 20.9 percent equivalent to $413.1m.

Loans continued to be the primary mode of assistance in 2024/25, comprising 66.9 percent of total disbursements at $1.07bn. Grant disbursements stood at $344.4m, representing 21.4 percent, while technical assistance contributed $187.2m, or 11.6 percent of the total.

Among multilateral development partners, the World Bank emerged as the largest contributor, disbursing $541m during the fiscal year. The Asian Development Bank was next with $443.2m. Other key multilateral contributors included the International Monetary Fund, which disbursed $41.8m, the European Union with $37.7m, and the Green Climate Fund contributing $15.8m. The United Nations system collectively mobilized $64.5m during the period.

Among bilateral partners, India topped the list with disbursements totaling $107.8m. The United Kingdom was next with disbursements of $84.2m, followed by the USAID at $67.1m, Japan with $58.3m, Switzerland at $30.1m, and Norway contributing $26.6m. Overall, multilateral partners accounted for the bulk of ODA disbursements, contributing $1.09bn, or 68.1 percent. Bilateral partners made up 27.9 percent percent with $448.4m, while the UN system contributed the remaining four percent.

According to the report, on-budget disbursements rose sharply by 23.5 percent to $1.36bn. This indicates improved alignment with national priorities and systems. Similarly, on-treasury disbursements surged by 63.3 percent to $847.5m. In contrast, off-budget support declined by 15.1 percent to $242m, suggesting a gradual move toward greater transparency and government ownership of development spending.

Despite the increase in absolute disbursement, ODA’s share in the national budget declined to 14.5 percent in 2024/25, down from 15 percent in the previous fiscal year. It marked the lowest level in a decade, according to the report. Sector-wise, the transport sector received the largest share of ODA, with disbursements totaling $252.8m, or 15.7 percent of the total. Next were economic affairs at $204.5m (12.7 percent), agriculture, forestry, fishing and hunting at $188.5m (11.7 percent), education at $184m (11.5 percent), and public order and safety at $170.3m (10.6 percent).

The contribution from international non-governmental organizations (INGOs) also also increased during the review year. Although the number of reporting INGOs declined to 49, total disbursements increased to $90m, up from $63.1m in the previous fiscal year. The report underscores broader shifts in Nepal’s development finance landscape. While public development finance, including government revenue and foreign aid, has nearly doubled over the past decade—from $4.8bn in 2015 to around $9.1bn in 2024—private financial flows have grown even more rapidly.

CPN-UML Vice Chairperson Bishnu Prasad Paudel has officially disavowed recent statements made by lawmaker Ram Bahadur Thapa in the House of Representatives, labeling them as a departure from the party’s core principles. 

In a stern response, Paudel clarified that the views expressed by Thapa, who currently serves as the party's parliamentary leader, are "contrary to the established policies and norms" of the CPN-UML.

Addressing the controversy, Paudel announced that the party's Central Secretariat would convene tomorrow to conduct a "serious discussion" regarding the breach of party discipline. The Vice Chairperson expressed his expectation that the leadership would reach a definitive and appropriate decision during the meeting to address the friction. 

This internal rift comes at a sensitive time for the party, as it navigates its role in the opposition following the 2026 general elections.

A new civic technology initiative, Janamat, has launched in Nepal, aiming to integrate blockchain technology into the country’s democratic processes. Developed by Superteam Nepal, a regional collective within the global Solana ecosystem, the platform is positioned as a ‘digital public square’ designed to facilitate transparent interaction between citizens and their elected officials.

The launch follows the March 2026 general elections, which saw a significant shift in the national political landscape and a heightened public demand for government accountability.

Janamat utilizes the ‘Solana blockchain’ to provide an immutable record of public sentiment. Unlike traditional social media platforms, the application’s core features are designed to prevent the alteration or deletion of data by central authorities.

The platform’s core functionality centers on four primary pillars designed to digitize civic participation. It features a verified petition system that enables citizens to elevate grassroots issues through a blockchain-backed trail of support, alongside dedicated policy debate forums where users can review, rate, and propose specific amendments to active legislative bills. 

To enhance oversight, the app integrates politician accountability profiles that maintain comprehensive track records of Members of Parliament, including a ‘Transparency Score’ derived from public feedback and their responsiveness to constituent needs. Furthermore, Janamat provides a formal channel for diaspora engagement, allowing the millions of Nepalis residing abroad to contribute to policy discussions and monitor the progress of community projects in real-time.

The introduction of Janamat comes at a critical juncture for Nepal's digital policy, as the newly formed government initiates a 100-day action plan to digitize public services like passports and driving licenses through the Nagarik App. 

However, this push for modernization faces a complex regulatory environment, with blockchain and cryptocurrency still subject to restrictive policies enforced by Nepal Rastra Bank (NRB). Proponents of the Janamat platform argue that utilizing blockchain technology can effectively reduce corruption in public works by ensuring fund allocations and project milestones remain transparently visible to all citizens. This argument gained significant traction during the 2026 election cycle, when the app’s pilot polling features correctly anticipated several high-profile outcomes, including the landslide victory observed in the Jhapa-5 constituency.

Superteam Nepal has indicated that the platform's primary objective is to foster a ‘continuous civic reflex’, moving public engagement beyond periodic election cycles. By recording votes and opinions on-chain, the platform seeks to provide a data-driven metric for public trust that is observable by both the government and the electorate.

Nepal’s external trade is expanding at a healthy pace. The country’s total foreign trade expanded by 13.55 percent to reach Rs 1,480.36bn over the first eight months of the current fiscal year. Figures released by the Department of Customs (DoC) show imports are rising strongly and exports are growing faster in percentage terms. However, the overall gap between the two remains stubbornly wide.

In the eight months of fiscal year 2025/26, trade deficit widened by 11.22 percent to Rs 1,098bn, up from Rs 987.39bn in the same period last year. Total imports surged by 12.54 percent to Rs 1,289.25bn, while exports by a notable 20.83 percent to Rs 191.11bn. On the surface, this suggests a positive shift—exports are growing faster than imports. But the reality is more complex.

Nepal’s external trade is overwhelmingly tilted toward imports. Even after healthy exports growth in the review period, imports account for 87.09 percent of total trade, while exports make up just 12.91 percent. Over the past decade, imports have nearly doubled, rising from Rs 984bn in fiscal year 2016/17 to Rs 1,804.12bn in the previous fiscal year. The trade deficit during the period remained at Rs 1527.09bn. Nepal imports fuel, vehicles, machinery, and a wide range of consumer goods, including food products, while exporting relatively little in comparison. This trend paints a picture of an economy driven largely by consumption rather than production. 

A persistent trade deficit puts continuous pressure on foreign currency reserves. The country relies heavily on remittances sent by workers abroad to finance its import bill. When remittance inflows weaken or external conditions shift, such as rising global fuel prices or slowing demand, this model becomes vulnerable.

In 2022, Nepal faced a sharp decline in foreign exchange reserves, which fell by more than 16 percent within seven months. To arrest the slide, the government imposed restrictions on the import of non-essential goods such as cars, cosmetics, and gold to prevent a balance of payments crisis. While those measures provided temporary relief, they did not address the structural roots of the problem.

Nepal is highly dependent on imports, and the gap between what it buys and sells abroad is still vast. The modest rise in share of exports in total foreign trade indicates that exports are either growing faster than imports or that import growth is beginning to slow slightly. However, the improvement is too small to significantly alter the macroeconomic picture. Also, a bulk of export receipts come from the export of processed edible oils like soybean and sunflower to neighboring India. Nepali importers import crude edible oil from countries as far as Argentina and export it to India after some value addition. If India increases crude import quota for its refineries, Nepal will lose a significant volume of its exports.   

One of the major factors behind rising imports and widening trade deficit is Nepal’s weak domestic production base. Limited industrial capacity, high production costs, and low competitiveness have for long affected Nepal’s ability to produce goods for both domestic consumption and export. As a result, the country remains reliant on foreign products even for basic needs. Despite being an agricultural nation, Nepal imports a significant volume of farm products, especially from India. The country imported paddy and rice worth Rs 27.95bn in the first eight months of fiscal year 2025/26. Potato imports also rose to reach Rs 5.73bn during the period.

Experts say traditional export sectors such as carpets, garments, and certain agro-products can perform better. However, this will be only possible if there is policy support aimed at boosting production, diversifying exports, and improving competitiveness. The political leadership should realize that encouraging industrial growth, investing in export-oriented sectors, and reducing reliance on imports are no longer optional—they are essential for long-term stability.

Scientists, policymakers, and development partners gathered at the 14th National Groundwater Symposium on Thursday to address the escalating water crisis in Madhes Province. The event, held at Hotel Mithila Yatri Niwas, comes as the region faces its first-ever officially declared drought disaster.

The symposium, themed ‘Challenges and Opportunities for Sustainable Development and Management of Groundwater in Nepal’, featured 149 participants from federal and provincial governments, academia, and international organizations. The event was led by the Water and Energy Commission Secretariat (WECS) and the provincial Ministry of Irrigation, Energy and Water Supply (MoEIWS), with technical coordination by the Center of Research for Environment, Energy and Water (CREEW).

Experts at the forum highlighted the severity of the current water shortage. Sanjeeb Baral, Executive Director of WECS, noted that the 2025 crisis was triggered by a monsoon that delivered only 46 percent of normal rainfall, leading to the drying of wells and boreholes across the province. “This is not merely a one-year anomaly,” Baral warned. “It is part of a larger climate change trend that reveals Madhesh’s deep vulnerability to shifting weather patterns.”

Data presented by Raj Kumar Singh, Vice-chairman of the Provincial Policy and Planning Commission, underscored the depletion: while water was once accessible at 100–200 feet, drillers now frequently must reach depths of 450–600 feet to find viable sources.

To combat the water shortage, the provincial government has outlined a three-pillar strategy centered on structural and environmental reform. This approach begins with legal reform through the drafting of dedicated provincial groundwater legislation to provide a clear regulatory framework. It further emphasizes institutional realignment to clarify the specific responsibilities of federal, provincial, and local governments, ensuring a more coordinated response. Finally, the strategy focuses on nature-based implementation, which includes restoring traditional ponds and protecting the critical Chure-Bhabar recharge zones from the impacts of unregulated mining.

Laxmi Pant of MoEIWS also advocated for the completion of the Sunkoshi-Marin Diversion Project, which aims to irrigate 122,000 hectares across six districts. Meanwhile, Manohara Khadka of the International Water Management Institute (IWMI) emphasized the need for ‘water diplomacy’ regarding transboundary aquifers shared with India.

The symposium highlighted significant gaps in current water management. Vishnu Prasad Pandey of Tribhuvan University noted a lack of geospatial maps and integrated databases, while Arinita Maskey Shrestha of UNICEF Nepal pointed to ‘systemic failures’, including low community awareness and a tendency for local governments to manage crises reactively rather than through advance planning.

In his closing remarks, Ram Kumar Khang, Acting Secretary of MoEIWS, committed to extending these technical dialogues to the district and local levels to ensure accountability.