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Nepalese Economy is characterized as one of the least developed countries in the world with very low per capita income and mass poverty. The structure of the economy is fragile; the economic environment is not favourable; performance of the economy is weak, and development indicators are unfavourable.
Contemporary Challenge: The economy has mainly been characterized by a long period of political transition and uncertain economic environment. Because of various socio-economic and political obstacles, there is high rate of unemployment, inequality and poverty in the country.
The contemporary features of Nepalese economy highlight both the structural characteristics and developmental challenges facing the nation:
One of the lowest in South Asia at approximately $1,190
About 25% population below poverty line
65% workforce in agriculture contributing 25% to GDP
Abundant water, mineral resources not fully harnessed
Persistent imbalance with imports exceeding exports
Modern and traditional sectors operating side by side
1.8% growth rate creating demographic pressure
25% of GDP from foreign employment remittances
Macroeconomic Indicators provide a comprehensive picture of Nepal's national economic performance and are crucial for policy formulation and economic planning at both federal and provincial levels.
Total value of goods and services: ~$36 billion
GDP plus net income from abroad including remittances
Average income: $1,190 per person annually
Average 6% with periodic fluctuations
Consistently negative with high import dependency
Approximately 40% of GDP and increasing
Provincial Economic Analysis since the adoption of federalism in 2015 has become crucial for understanding regional disparities and planning decentralized development across Nepal's seven provinces.
Leading Economic Contributor (34.5% GDP share)
Agricultural Heartland (17.8% GDP share)
Diverse Economy (16.2% GDP share)
Karnali & Sudurpashchim (9.5% combined GDP)
Economic Transformation involves shifting Nepal from a traditional agrarian economy to a modern, diversified economic structure through strategic investments and policy reforms across key sectors.
Harnessing 43,000 MW hydropower potential
Leveraging natural and cultural heritage
Transport, energy and digital connectivity
Productivity enhancement and commercialization
Education, health and skills development
Future Outlook: With successful implementation of federalism, strategic investments in infrastructure and productive sectors, and effective governance, Nepal has the potential to achieve accelerated economic growth and sustainable development in the coming decades, transforming from a least developed country to a developing nation.