The Asian Development Bank (ADB) has projected Nepal’s economy to grow by 4.4 percent in 2025, up from 3.9 percent in 2024. The forecast was published in the Asian Development Outlook (ADO) April 2025 , released Wednesday, April 9. The report anticipates that Nepal’s economic growth will accelerate further in 2026, reaching 5.1 percent. According to the ADB, this upward trajectory will be driven by strong household consumption supported by higher remittance inflows, moderate inflation, and increased investment from both the private and public sectors.
Inflation in Nepal is estimated to remain steady at 5.2 percent in 2025 and is expected to ease slightly to 5 percent in 2026.
The ADB also provided forecasts for developing economies across Asia and the Pacific. Regional growth is expected to slow slightly from 5.0 percent in 2024 to 4.9 percent in 2025, and then further to 4.7 percent in 2026. The report attributes continued growth to domestic demand and rising global demand for semiconductors, especially driven by the boom in artificial intelligence. However, the outlook is tempered by trade tensions and rising tariffs, which could hinder trade and investment.
The ADB noted that inflation across the region is expected to moderate to 2.3 percent in 2025 and 2.2 percent in 2026, owing to declining global food and energy prices. This easing in inflation could allow many central banks in the region to loosen monetary policy.
However, the report also warns of growing risks to the region’s economic prospects. Although the current growth forecasts were prepared before the United States announced new tariffs on April 2, the ADB has included an analysis of how such measures might impact regional economies. The report cautions that faster-than-expected changes in U.S. trade policy, along with rising policy uncertainty and possible retaliatory tariffs, could weaken trade, deter investment, and slow down growth.
Geopolitical tensions and conflict also pose potential risks. While tensions in the Middle East have temporarily eased, the ADB emphasizes that the situation remains fragile. Any escalation could disrupt supply chains, increase food and energy price volatility, and intensify global economic uncertainty. The war in Ukraine also continues to cloud the outlook, with hopes for economic stability in the Caucasus and Central Asia hinging on the resolution and terms of any potential peace agreement. -- RSS
