World Bank

Nepal has formally requested the United Nations to postpone its graduation from Least Developed Country (LDC) status to November 2029, citing significant economic challenges. The Ministry of Foreign Affairs has cited five key reasons for the deferral, including the impact of regional conflicts, risks to preferential market access, and slow transition preparations.

Nepal's economic growth forecasts for the fiscal year 2025/26 are showing significant divergence, with the World Bank predicting 2.3%, the Asian Development Bank 2.7%, and the National Statistics Office 3.85%. Meanwhile, the Chinese app TikTok is in a tax dispute with Nepalese authorities over unpaid Value Added Tax (VAT) for the current fiscal year, despite having paid VAT in previous years. Development Finance Institutions (DFIs) have collectively invested $1.09 billion in Nepal's private sector between 2014 and 2023, with a significant portion directed towards hydropower and commercial banks like NMB Bank.

Nepal has initiated a new $90 million digital transformation project, co-financed by the World Bank and Asian Development Bank, aiming to streamline public services for 7 million citizens within five years. This initiative follows the cancellation of a similar $140 million World Bank project in 2024 due to zero disbursement, highlighting a history of underperformance in the country's digital development sector.

Tobacco use is a leading cause of death and disease in Nepal, contributing to nearly 39,200 deaths annually and costing the nation an estimated Rs. 45 billion each year in healthcare expenditures and productivity losses. This escalating health crisis is placing significant pressure on Nepal's national health insurance program, threatening its long-term sustainability due to increased claims for tobacco-related chronic conditions.