Nepal GDP growth at 3.85% in 2025-26, below decade average: Statistics Office
Synopsis
Nepal's economy is stuck in a slow lane — projected at just 3.85% growth for FY2025-26, below its own 10-year average and well behind regional peers. With paddy output declining, West Asia conflict threatening remittances from GCC countries, and crude oil prices spiking nearly 60% in a month, the risks to Nepal's fragile, remittance-dependent economy are mounting fast.
Key Takeaways
Nepal's NSO projects GDP growth at 3.85% for fiscal year 2025-26 , below the 10-year average of 4.2% .
The agriculture, forestry, and fisheries sector — contributing 24.03% to GDP — is expected to grow by only 1.58% , with paddy output projected to decline 4.16% .
The electricity and gas sector leads growth at 20.93% , followed by financial and insurance at 9.16% .
GCC countries account for roughly 40% of Nepal's total remittance inflows, now at risk from the West Asia conflict .
International crude oil prices reportedly rose nearly 60% within a month due to supply chain disruptions, adding pressure on domestic prices and fertiliser costs.
The World Bank and Asian Development Bank (ADB) have flagged significant downside risks to Nepal's economy from rising oil prices, falling tourist arrivals, and declining remittances.
Nepal's economy is projected to grow at 3.85 per cent in fiscal year 2025-26, according to the National Statistics Office (NSO), which released its National Accounts Estimate on Tuesday, 28 April 2025. The figure, while marginally above the government's revised projection of 3.5 per cent made in February, falls below the country's 10-year average growth rate of 4.2 per cent — underscoring a prolonged low-growth trajectory that has persisted since the Covid-19 shock.
A Decade of Sluggish Growth
Nepal's Finance Ministry, in a white paper on the national economy released on Monday, acknowledged that economic growth has remained
Point of View
Even as neighbours accelerate. The West Asia conflict introduces a new and potent threat vector: with GCC remittances comprising 40% of inflows, any sustained disruption could compress household consumption, the one engine that has kept Nepal's domestic demand afloat. The NSO's silence on the West Asia conflict in its formal estimates, even as the Finance Ministry has acknowledged it, points to a troubling gap between official risk assessment and public communication.
NationPress
1 May 2026
Frequently Asked Questions
What is Nepal's projected GDP growth rate for 2025-26?
Nepal's National Statistics Office has projected GDP growth at 3.85% for fiscal year 2025-26, slightly above the government's revised estimate of 3.5% but below the 10-year average of 4.2%.
Why is Nepal's economic growth so low?
Nepal's growth is being dragged by a weak agriculture sector, particularly a projected 4.16% decline in paddy output. Structural factors include dependence on remittances, underdeveloped industry, and vulnerability to external shocks such as the ongoing West Asia conflict.
How does the West Asia conflict affect Nepal's economy?
The conflict has disrupted supply chains, pushing international crude oil prices up by nearly 60% within a month, raising domestic prices and fertiliser costs. More critically, GCC countries account for about 40% of Nepal's remittance inflows, putting a key pillar of the economy at risk.
Which sectors are growing fastest in Nepal in 2025-26?
The electricity and gas sector leads with an estimated gross value added growth of 20.93%, followed by the financial and insurance sector at 9.16%. Public administration and education are among the slowest-growing sectors.
What have the World Bank and ADB said about Nepal's economic risks?
Both the World Bank and the Asian Development Bank have warned that the West Asia conflict poses significant downside risks to Nepal through rising global oil prices, declining tourist arrivals, and a potential drop in remittances from Gulf Cooperation Council countries.
