Nepal’s net services income deficit has widened significantly amid rising foreign travel and education spending, according to the latest Nepal Rastra Bank (NRB) statistics.
The deficit remained Rs 86.53 billion in the first 10 months of the current fiscal year, compared to Rs 50.31 billion recorded in the same period last fiscal, according to the latest update on the country’s macroeconomic and financial situation.
The foreign travel and education expenditure of Nepalis outpaced the country’s travel income.
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Under the service account, travel income—primarily from tourism—rose by 8.6% to Rs 75.71 billion between mid-July 2024 and mid-May 2025, from Rs 69.73 billion in the same period previous fiscal. However, travel payments surged by 17.9% to Rs 185.03 billion, with education-related expenses alone accounting for Rs 112.44 billion, the central bank said. In the same period last year, total travel payments stood at Rs 156.95 billion, including Rs 104.25 billion for education.
The sharp increase in outbound travel and education spending highlights the growing trend of Nepali students studying abroad, particularly in countries like Australia, the US, and the UK, contributing to the widening services deficit.
Current Account in Surplus
Despite the widening services income deficit, the current account remained at a surplus of 255.93 billion in 10 months, compared to a surplus of Rs 193.31 billion in the same period last fiscal. In US dollar terms, the current account registered a surplus of $1.89 billion compared to a $1.45 billion surplus in the same period last fiscal.
The improvement was due to strong remittance inflows, which surged 13.2 percent in the review period to Rs 1,356.61 billion.
Read: Remittance Inflows Surge 13.2% in First 10 Months of FY 2024/25: NRB
FDI and Capital Transfers Increase
Net capital transfers rose to Rs 8.48 billion, compared to Rs 5.26 billion in the same period last year. Foreign direct investment (FDI) in equity also saw an uptick, reaching Rs 10.6 billion compared to Rs 7.05 billion previously.
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Balance of Payments
Balance of Payments (BoP), also known as balance between money coming in and going out, remained at a surplus of Rs 438.52 billion, higher than the Rs 392.64 billion in surplus recorded in the same period last fiscal. In the US Dollar terms, the BOP remained at a surplus of 3.23 billion in the review period compared to a surplus of 2.95 billion in the same period of the previous year.
