Nepal’s economy currently remains under strain, with weak revenue collection, sluggish capital expenditure and declining foreign grants but with strong foreign currency reserves. Against this backdrop, noted economist Swarnim Wagle has assumed charge as finance minister.

Wagle faces an immediate test: raise revenue, accelerate capital spending and rein in recurrent expenditure while restoring fiscal discipline. Interest rates have fallen steadily, yet credit off-take remains weak, leaving banks flush with lendable cash. The private sector’s confidence has eroded, citing an unfavourable investment climate and policy uncertainty. Reviving that confidence through credible fiscal management and targeted public spending will be central to the ministry’s role.

Wagle entered Parliament through a by-election and secured a decisive victory in the March 21 general election. Born in Gorkha, he studied up to higher secondary level at Budhanilkantha School. He was a national board second in the 1990 SLC examinations.

He holds a PhD in development economics from the Australian National University, a master’s degree in international development and public policy from Harvard University, and a bachelor’s degree in economics from the London School of Economics. His academic credentials place him among Nepal’s most highly educated economists and politicians.

An international development economist, Wagle has worked for over 25 years in Nepal and abroad. He served as chief economic adviser for Asia-Pacific at the United Nations Development Programme headquarters in New York, overseeing 36 countries. He was previously a member and later vice-chair of the National Planning Commission. He has also worked as a senior economist at the World Bank and UNDP, and serves as a Senate member at Kathmandu University and chair of the Institute for Integrated Development Studies.

Politically, Wagle has long been associated with Nepal’s democratic movement. He was active during the civil disobedience movement and the 1990 People’s Movement, and has contributed to policy and manifesto drafting for elections. Currently vice-chairman of the Rastriya Swatantra Party, he now shoulders the responsibility of steering an economy marked by structural weaknesses.

Key indicators may appear stable, but underlying conditions remain fragile. Economic growth is slow, and public sentiment is subdued. Years of political instability and policy inconsistency have weakened the investment climate, pushing many young people and entrepreneurs to seek opportunities abroad. Businesses face procedural hurdles at every stage, from registration to closure, reinforcing perceptions of systemic inefficiency.

Illicit trade along border areas has increased, while liquidity remains concentrated in banks rather than circulating effectively in the broader economy. Agricultural land is increasingly left fallow, and commercial farming remains limited. Trust in public institutions has weakened, further dampening investor confidence, including among foreign investors.

Former finance minister Prakash Sharan Mahat said narrowing the gap between income and expenditure must be a priority. He warned that while the government’s pledge to generate large-scale employment is welcome, delivering results will be challenging amid an uncertain global environment. “Outcomes require identifying core problems and sustained effort,” he said, stressing the need for realism over populism.

Managing limited resources and rising social security obligations, among others, while financing infrastructure and jobs creation will require efficient resource mobilisation and spending discipline. With a strong parliamentary majority, the government has little room for excuses.

The Rastriya Swatantra Party’s manifesto sets ambitious targets: average annual economic growth of 7 percent over five years, per capita income exceeding $3,000, and an economy approaching Rs10 trillion. It also promises lower tax burdens without reducing revenue, reform of the exchange rate peg with the Indian rupee, streamlined investment through a one-stop service, and completion of stalled national pride projects within two years.

Experts stress that restoring policy stability and institutional credibility is critical. Strengthening fiscal federalism, improving regulatory clarity and enabling private sector-led growth will be key. Wagle’s tenure will be defined by whether he can move beyond headline indicators and address the structural constraints holding the economy back.