Economy of Nepal

Economy of Nepal

Kathmandu, the financial centre and capital of Nepal
Currency	Nepalese rupee (NPR, रू)
Fiscal year	16 July - 15 July
Trade organizations	WTO, SCO and SAFTA
Country group	Developing/Emerging[1] Lower-middle income economy[2]
Statistics
Population	29,164,578 (2021)[3]
GDP	$57 billion (nominal, 2023 est)[4] $163.82 billion (PPP, 2023 est)[4]
GDP growth	4.2% (FY2020-21) 5.8% (FY2021-22) 4.4% (FY2022-23) [5]
GDP per capita	$1,789 (nominal, 2023 est.)[4] $5,321 (PPP, 2023 est.)[4]
GDP by sector	Agriculture: 24.5% Industry: 13.7% Services: 61.8% (2022 est.)[6]
Inflation (CPI)	7.76%(April 2023)[4]
Population below poverty line	13.8% (2022)[7][unreliable source] 45.3% on less than $3.20/day (2022)[8]
Gini coefficient	32.8 medium (2010)[9]
Human Development Index	0.601 medium (2023)[10] (142nd) 0.449 low IHDI (2021)[11]
Labour force	16,016,973 (2020)[12] semi skilled labor[6] 76.2% employment rate (2020)[13]
Labour force by occupation	agriculture: 43.1% industry: 21.24% services: 35.66% (2020)[6]
Unemployment	11.47% (2021)[6]
Main industries	tourism, carpets, textiles; small rice, jute, sugar, and oilseed mills; cigarettes, cement and brick production[6]
External
Exports	$1.49 billion (2022)[6]
Export goods	clothing, pulses, carpets, textiles, juice, jute goods[6]
Main export partners	India(+) 53.1%  United States(+) 11.8%  Turkey(+) 9.2% (2020)[6]
Imports	$13.2 billion (2022)[6]
Import goods	petroleum products, machinery and equipment, gold, electrical goods, medicine[6]
Main import partners	India(+) 68.03%(2021est.)  China(-) 31.97%(2021est.) (2017)[6]
FDI stock	$20 billion (31 July 2013 est.)[6] Abroad: NA[6]
Gross external debt	$11 billion (31 December 2020)[6]
Public finances
Government debt	41.38% of GDP (2021/22)[14]
Budget balance	−1% (of GDP) (2022 est.)[6]
Revenues	10.925 billion (2017 est.)[6]
Expenses	15.945 billion (2017 est.)[6]
Foreign reserves	$14.36 billion (April 2024)[15]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars.

The economy of Nepal is developing category and largely dependent on agriculture and remittances.^[6] Until the mid-20th century Nepal was an isolated pre-industrial society, which entered the modern era in 1951 without schools, hospitals, roads, telecommunications, electric power, industry, or civil service. The country has, however, made progress toward sustainable economic growth since the 1950s. The country was opened to economic liberalization, leading to economic growth and improvement in living standards when compared to the past. The biggest challenges faced by the country in achieving higher economic development are the frequent changes in political leadership, as well as corruption.

Nepal has consistently been ranked as one of the poorest countries in the world.^[16][17][18]

Nepal has used a series of five-year plans in an attempt to make progress in economic development. It completed its ninth economic development plan in 2002; its currency has been made convertible, and 17 state enterprises have been privatised. Foreign aid to Nepal accounts for more than half of the development budget. Government priorities over the years have been result in the development of transportation and communication facilities, agriculture, and industry. Since 1975, improved government administration and rural development efforts have been emphasised.

Agriculture remains Nepal's principal economic activity, employing about 65% of the population and providing 31.7% of GDP. Only about 20% of the total area is cultivable; another 40.7% is forested (i.e., covered by shrubs, pastureland and forest); most of the rest is mountainous. Fruits and vegetables (apples, pears, tomatoes, various salad greens, peach, nectarine, potatoes), as well as rice and wheat are the main food crops. The lowland Terai region produces an agricultural surplus, part of which supplies the food-deficient hill areas.

GDP is heavily dependent on remittances (9.1%) of foreign workers. Subsequently, economic development in social services and infrastructure in Nepal has not made dramatic progress. A countrywide primary education system is under development, and Tribhuvan University has several campuses. Although eradication efforts continue, malaria had been controlled in the fertile but previously uninhabitable Terai region in the south. Kathmandu is linked to India and nearby hill regions by road and an expanding highway network. The capital was almost out of fuel and supplies, due to a crippling general strike in southern Nepal on 17 February 2008.^[19]

Major towns are connected to the capital by telephone and domestic air services. The export-oriented carpet and garment industries have grown rapidly in recent years. Together, they account for approximately 70% of the country's merchandise exports.

The Cost of Living Index in Nepal is comparatively lower than many countries but not the least. The quality of life has declined to a much less desirous value in recent years.^[20] In the 2021 Global Hunger Index, Nepal ranks 76th out of the 116 countries with sufficient data to calculate 2021 GHI scores. With a score of 19.1, Nepal has a level of hunger that is moderate.^[21] Nepal has the worst road infrastructure in Asia.^[22]