KATHMANDU:- The World Bank has projected Nepal’s economic growth to slow from 4.6% in 2025 to 2.1% in 2026, reflecting the impact of Gen Z protests and ongoing political transition.

Growth is expected to rebound to 4.7% in 2027, supported by reconstruction efforts, according to the Nepal Development Update.

The report highlights the services sector as the most affected and notes that investor confidence depends on successful political transition and sound economic management.

Finance Minister Rameshore Prasad Khanal said the government has introduced a business recovery plan, including grants, tax exemptions, and a reconstruction fund to restore private sector activity.

The report also stresses the need to increase public investment, currently 7.9% of GDP, to meet infrastructure needs estimated at 10–15% of GDP.

David Sislen, World Bank Division Director, emphasized improving project design, budgeting, land acquisition, and procurement processes to accelerate growth and job creation.