Nepal

Fact Sheet

Population (mn) 27.8mn
GDP (Market Exchange rate US$) 19.7bn
GDP (PPP US$) 42.06bn
GDP per capita (PPP US$) 2,375.58
GDP PER CAPITA (Current US$) 712
GDP growth rate (%) 5.2
Market Capitalization (US$) 10.78bn
Remittances contribution (% to GDP) 25
Exchange rate ( US$:NRS; 2015 est) 101.9
Public debt (%; 2015 est) 28.8
Inflation (%; 2015 est) 7.1

Source:
- The World Bank, unless otherwise specified.
- Market Capitalization: Nepal Stock Exchange Ltd., unless otherwise specified.

 

Background

The Federal Democratic Republic of Nepal is situated in South Asia with an area of 147,181 square km. It is bordered in the north by China (Tibet Autonomous Region) and in all other sides by India. It is the 41st most populous nation in the world with a population of around 28 million. Nepal lies in the Himalayas and is home to 8 out of 10 tallest mountains in the world including Mount Everest. Nepal is exceptionally diverse in terms of geography, ethnicity, language, flora and fauna.

In the past Nepal was a multiparty democracy within the framework of a constitutional monarchy. The Maoist rebellion 1996 led to a 10-year insurgency in the nation. Following the end of the insurgency, Nepal went through a political transition and restructuring entailing a successful peace accord in 2006, an interim constitution and the integration of the Maoist party into the democratic process. In 2008 the monarchy was dissolved and a federal multiparty representative democratic republic was established. The Constitution Assembly is currently drafting a new constitution for Nepal.

 

Economy

Located between the world's two largest emerging markets, Nepal as a frontier market has a tremendous economic and business potential. Since the 1990's Nepal has opened up to international trade and globalisation. Nepal's private sector has also expanded due to reformed laws and regulations. In 2015, Nepal was ranked 108th (previously 123rd) out of 189 economies, and 2nd in South Asia in terms of ease of doing business and continues to show improvement. In addition to privatisation of public monopolies, Nepalese sectors have also been opened up for foreign investment with liberal economic policies. In 2014, Finance Ministry of Nepal initiated the second phase of economic liberalisation.

Nepal is coping with the aftermath of the massive earthquake on 25th April 2015. GDP is expected to decelerate in FY2015/16 as a result. However reconstruction efforts are underway and Nepal is receiving international support to facilitate recovery. The FDI pledges have risen 250% at the start of the 2014/15 fiscal year; however the earthquake is likely to affect these commitments. The recent earthquake did not hit areas where many industries that attract FDI are operating.