IMF Projects Nepal’s Economy to Grow by 4.3 Percent in 2025

The International Monetary Fund (IMF) has projected Nepal’s economy to grow by 4.3 percent in 2025 and 5.2 percent in 2026.

Releasing its flagship World Economic Outlook report on Tuesday, the IMF said Nepal’s economy, which had shrunk to 2 percent in 2023, rebounded to 3.7 percent in 2024. It estimated that growth will improve moderately to 4.3 percent in 2025 and reach 5.2 percent by 2026.

The IMF also projected that Nepal’s inflation rate will remain at 4.1 percent in 2025 and 4.2 percent in 2026, down from 5.4 percent in 2024.

Meanwhile, the IMF has projected that Nepal’s current account deficit to gradually narrow over the next two years.

According to the IMF’s World Economic Outlook data, Nepal’s current account balance stands at –1.9 percent of GDP in 2024. The deficit is expected to shrink to –0.7 percent in 2025 and further to –0.4 percent in 2026.

The projections indicate a steady improvement in Nepal’s external sector indicators, following several years of deficit caused by higher import costs.

In the global context, the IMF raised its 2025 global growth forecast to 3.2 percent from 3.0 percent in July, citing resilience in major economies despite trade tensions. However, compared with the 3.3 percent growth expected in 2024, the projection still points to a slight slowdown, with global growth forecast to slow further to 3.1 percent in 2026, according to the World Economic Outlook report.