Finance Minister Swarnim Wagle on Wednesday presented the Economic Survey for the fiscal year 2025-26 in the federal Parliament, projecting Nepal’s economy to expand by 3.85 percent during the current fiscal year.

Presenting the survey, Wagle said Nepal’s macroeconomic indicators had improved, and the social sector had made satisfactory progress despite uncertainty in the global economy and regional conflicts.

The survey estimates the size of Nepal’s economy at Rs66 trillion, while per capita gross national income is projected to reach $1,535. At a time when the global economy is projected to slow to 3.1 percent growth, the survey described Nepal’s expected growth rate as positive.

Province-wise, Bagmati and Gandaki are projected to record growth rates above the national average, while other provinces are expected to remain below average.

According to the survey, the agriculture sector’s contribution to gross domestic product is estimated at 24 percent, while the non-agriculture sector accounts for 76 percent. Bagmati Province continues to dominate economic activity, contributing 36.7 percent to the country’s GDP.

However, paddy production is estimated to have declined by 4.2 percent to 5.7million metric tonnes during the current fiscal year.

Wagle told Parliament that federal revenue increased by 3.2 percent until mid-March of the current fiscal year. Government expenditure rose by 10.4 percent, although capital expenditure remained weak.

Nepal’s total public debt has reached Rs2.87 trillion, equivalent to 43.6 percent of GDP. The government mobilised Rs300 billion in public debt during the fiscal year.

The survey showed strong external sector indicators. Remittance inflows increased by 37.7 percent to Rs1.45 trillion, while foreign exchange reserves climbed to a record Rs3.41 trillion, enough to cover 18.5 months of imports of goods and services.

However, the trade deficit widened by 11.2 percent to Rs1.098 trillion, which the survey identified as a continuing challenge for the economy.

The survey also highlighted significant growth in digital payments. Transactions through QR codes exceeded Rs125 billion by mid-March.

Nepal maintained a “BB minus” stable outlook in the 2025 sovereign credit rating, indicating improved international credibility, according to the survey.

Inflation remained under control at an average of 2.13 percent.

Nepal had also made progress in human development indicators. The Human Development Index reached 0.622, while average life expectancy rose to 71.3 years.

Maternal mortality declined to 151 per 100,000 live births and the under-five mortality rate fell to 33 per 1,000 live births.

In education, the net enrolment rate at the basic level reached 97.8 percent. The survey also noted growing participation in health insurance and the Social Security Fund.