Nepal’s economy grew to an estimated 7.1% in FY2019. GDP growth will likely moderate to 5.3% in FY2020 largely owing to the global outbreak of COVID-19 pandemic. 
 
The economy may rebound to 6.4% in FY2021 with the resurgence of economic activities post-COVID. Inflation rose to 4.6% in FY2019 and will inch up to 6.0% in FY2020 and stay moderate at 5.5% in FY2021.

This edition provides a detailed analysis of the economic impact of COVID-19 on the economy. It also sheds light on intraregional trade investment in South Asia with a focus on Nepal. Intraregional trade has hovered at slightly above 5.0% of South Asia’s total trade, while intraregional FDI is mere 1.1% of total outward FDI in South Asia. Nepal’s prospects of attracting more FDI from within the region are also discussed particularly in the context of greater domestic political stability and recently enacted legal reforms.