World Bank cuts Nepal’s growth rate to 2.1% for 2025/26 from 5.2%
Kathmandu, Oct. 8: Nepal’s economy is projected to grow at a sluggish rate of 2.1 per cent in the current fiscal year 2025/26, significantly lower from the previous year’s 4.6 per cent, according to the World Bank’s latest South Asia Development Update: Jobs, AI and Trade, published on Tuesday. ‘In Nepal, recent unrest and heightened political and economic uncertainty is expected to cause growth to decline to 2.1 per cent in FY25/26, with a potential range of negative 1.5–2.6 per cent,’ said the report. The Rising Nepal
Nearly 7,000 tourists flock to Mustang in a day
The Himalayan district of Mustang saw a record tourist influx on Friday, with 6,859 visitors entering in a single day via the Beni–Jomsom road, according to the District Police Office. Among them, 6,506 were domestic and 353 were foreign tourists, while 2,168 vehicles were recorded heading to the district from Myagdi. The rush has overwhelmed the region’s capacity, with traffic jams along the Beni–Jomsom highway and hotels from Ghansa to Muktinath running full. According to reports, almost all of the hotels along the route being fully packed. The Himalayan Times
Nepal still on FATF greylist
The Financial Action Task Force (FATF) kept Nepal and 17 other countries on its greylist and reviewed their progress in addressing strategic deficiencies in combating money laundering, terrorist financing and proliferation financing. These countries were placed on the list due to strategic deficiencies in their financial systems and have 24 months to implement necessary legal, policy and structural reforms. The grey listing negatively impacts Nepal’s economy, financial sector and international relations. The Tribune
Other related developments (as reported)
Hyatt Regency Kathmandu suspends operations following vandalism; PM Karki expresses concern — linked coverage available on The Himalayan Times site. The Himalayan Times
From the World Bank report coverage: “The protests reflected frustration with governance and deeper discontent over the lack of economic opportunities for Nepal’s youth.” Growth was supported earlier in the year by hydropower production and a rebound in industrial output, but recent unrest has been identified as a key downside risk for FY25/26. The Rising Nepal
Share Your Thoughts
- What should be the immediate economic priority for the interim government to stabilise investor confidence?
- How can local tourism hotspots like Mustang manage sudden surges without straining infrastructure?
- What practical steps would help Nepal meet FATF requirements within the two-year window?
- How might youth-led political movements shape Nepal’s economic and governance reforms going forward?
Sources: The Rising Nepal, The Himalayan Times, The Tribune