ADB Projects 4.4% Economic Growth for Nepal in 2025
09th Apr 2025
AI Image
The Asian Development Bank (ADB) has projected that Nepal’s economy will grow by 4.4 percent in 2025, up from 3.9 percent in 2024. The forecast was made in the Asian Development Outlook (ADO) April 2025 report, launched today.
The report states that growth in Nepal is expected to accelerate further, reaching 5.1 percent in 2026. Robust consumption supported by higher remittance inflows, moderate inflation, and increased private and public investments will underpin Nepal’s economic activity.
Nepal’s inflation is estimated to be 5.2 percent in 2025 and 5 percent in 2026, according to the ADO report.
In the broader region, economies in developing Asia and the Pacific are projected to grow by 4.9 percent in 2025, slightly down from 5.0 percent last year. Regional growth is expected to decline further to 4.7 percent in 2026.
Solid domestic demand and a strong global appetite for semiconductors driven by the artificial intelligence boom are supporting growth in the region. However, tariffs and trade uncertainty are expected to act as headwinds.
The growth forecasts were finalized prior to the 2 April announcement of new tariffs by the US administration. As such, the baseline projections only reflect tariffs that were in place previously. The report does include an analysis of how higher tariffs may affect growth in Asia and the Pacific.
The ADB notes that while economies in the region are resilient, faster and larger-than-expected changes in US trade and economic policies pose risks to the outlook. Increased policy uncertainty and retaliatory measures could slow trade, investment, and growth.
Geopolitical risks also loom large. Although conflict and tensions in the Middle East have eased, the outlook remains fragile. Escalations could disrupt supply chains and increase food and energy prices. Additionally, the ongoing war in Ukraine continues to pose uncertainty, especially for economies in the Caucasus and Central Asia, where gains depend heavily on the terms of any future peace agreement.
Comments