Consumption accounts for 90.3 percent of Nepal’s economy, private sector dominates spending: Economic Survey

KATHMANDU, May 27 : The government has said Nepal’s economy is expected to grow by only 3.85 percent in the current Fiscal Year (FY) 2026/27.

Presenting the Economic Survey in the House of Representatives on Wednesday, Finance Minister Dr Swarnim Wagle said the preliminary estimate projects economic growth at 3.85 percent. According to the survey, Nepal’s gross domestic product (GDP) is expected to reach Rs. 66.09 trillion this fiscal year.

The economy had grown by 4.43 percent in the previous fiscal year. The government estimates that, except for Bagmati and Gandaki provinces, all other provinces will record growth below the national average during the current FY.

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According to the survey, agriculture will contribute 24 percent to GDP, while the non-agriculture sector will contribute 76 percent. The report notes that over the past decade, the contribution of agriculture has gradually declined while the service sector’s share has continued to increase.

The survey estimates agricultural sector growth at 1.58 percent and non-agriculture sector growth at 4.54 percent this FY. In the previous year, the respective growth rates stood at 3.05 percent and 4.12 percent.

The report also highlights Nepal’s heavy dependence on consumption. Consumption expenditure is estimated to account for 90.3 percent of GDP this fiscal year. Of the total consumption, the private sector’s share is projected at 91.26 percent, while the government sector accounts for 6.62 percent and the non-government sector for 2.12 percent.

Per capita income is estimated to reach 1,535 US dollars.

According to the survey, most public finance indicators remain in a mixed condition, though improvements have been seen in several social indicators. Absolute poverty has declined to 20.27 percent, while multidimensional poverty has fallen to 17.4 percent.

The survey states that irrigation facilities now cover 44.6 percent of cultivable land and 62.6 percent of irrigable land.

The average life expectancy of Nepalis has reached 71.3 years. The number of people receiving social security allowances has climbed to 3.641 million, of whom 46.14 percent are senior citizens above the age of 70.