Nepal has been ranked 145th on the United Nations Development Programme’s (UNDP) Human Development Index (HDI) for 2025, continuing its placement within the medium human development category. The report, released on Tuesday, highlights persistent disparities and emerging uncertainties in global development, especially as artificial intelligence (AI) rapidly transforms economies and societies.

Nepal ranks above Pakistan (168), which remains in the low HDI category, but trails South Asian peers such as Bhutan (125), India and Bangladesh (both at 130), all of which also fall under the medium HDI group. Sri Lanka (89) and the Maldives (93) lead the region with high human development scores, reflecting stronger performance in education, health, and income indicators.

This year’s Human Development Report, themed “A Matter of Choice: People and Possibilities in the Age of AI”, warns that global HDI progress—already disrupted by the pandemic—may be losing momentum. The gap between very high and low HDI countries, once shrinking, has been widening again since 2020.

AI, described in the report as a “development wildcard”, is central to this year’s analysis. The report argues that AI’s growing influence poses both opportunities and risks for human development, depending largely on how societies choose to deploy it. AI’s integration in education, healthcare, and the workplace is accelerating, with two-thirds of respondents in low, medium, and high HDI countries expecting to use AI in these areas within the next year.

In the context of Nepal, UNDP stresses that while AI could be leveraged to close development gaps, this will require deliberate policy choices that promote human agency, equity, and inclusion. The report advocates for building a “complementarity economy” where AI enhances rather than replaces human capabilities, investing in education and healthcare technologies tailored to national contexts, and embedding social priorities into AI design and deployment.

“Development depends less on what AI can do—and more on the choices people make with it,” the report notes, underscoring the urgency of equipping citizens with the skills and tools needed to thrive in an AI-driven world.

The report also highlights that younger populations, such as those in Nepal, are at a crossroads: AI offers opportunities for enhanced learning and economic inclusion, yet it also risks deepening inequalities if access and agency are not ensured.