Macroeconomic Update: Nepal (September 2020)
This Update provides forecasts for FY2021 growth, inflation and current account balance while analyzing Nepal’s macroeconomic performance in FY2020.
Nepal’s economy is anticipated to expand by mere 1.5% in FY2021, down from preliminary estimate of 2.3% in FY2020, primarily owing to continued stringent measures to contain the spread of COVID-19 and expected sharp economic downturn in neighboring India—Nepal’s predominant trade partner. Average inflation edged up to 6.2% in FY2020 and is forecast to moderate to an average of 5.5%. The current account deficit is expected to widen to –1.9% in FY2021 as import growth marginally picks up and remittance inflows decline owing to a slowdown in global demand from this crisis.
This edition's Theme Chapter sheds light on Nepal’s journey of digital development with specific recommendations for e-commerce promotion. Despite some notable progress, limited internet connectivity, lack of advanced information technology devices, and technical knowhow have held back Nepal’s aspiration toward greater digitalization.
- Executive Summary
- Macroeconomic Update
- Theme Chapter – Digital Transformation in Nepal: Developments and Challenges