Nepal profile

Demography and Health

Nepal’s population stands at about 29.65 million in 2024, placing it around the 51st-largest globally, with a notable outflow of people as indicated by a net migration of −401,282 in 2024. The birth rate is 19.3 per 1,000 people and the death rate is 6.93 per 1,000, yielding a modest natural increase, while life expectancy at birth is 70.4 years, reflective of a country in the lower-middle range of global health outcomes. Under-5 mortality is 26.5 per 1,000 live births, signaling ongoing child-health challenges despite overall gains in health indicators. Nutrition remains a concern for some segments, with the prevalence of undernourishment at 5.7% (2022) and a national poverty headcount of 20.3% (2022), highlighting persistent vulnerability among households. Health system capacity appears constrained: hospital beds total 0.39 per 1,000 people (2021) and physicians 0.867 per 1,000 people (2021), suggesting limited access to care, especially in rural areas. Health spending amounts to 6.66% of GDP (2023) with domestic general government health expenditure per capita, PPP, of 102 international dollars (2022), indicating room to strengthen financing for preventive and primary care. Mental health needs are evident, given a suicide mortality rate of 10.1 per 100,000 (2021). Digital connectivity is expanding, with 55.8% of the population using the Internet (2023), offering a channel to expand health information and telemedicine, provided infrastructure and affordability keep pace. The population dynamics are further shaped by significant out-migration, underscoring the importance of social protection and domestic health investment to reduce vulnerability while capitalizing on remittance-linked resilience.

Economy

Nepal’s economy is small and open, with GDP per capita at current prices around $1,447 in 2024 and a PPP-based per-capita figure of $5,737, signaling living standards well below advanced economies but with growth potential. Inflation runs at about 7.11% in 2023, indicating macroeconomic pressure on households and firms. Exports of goods and services account for 7.62% of GDP in 2024, while imports total 32.9% of GDP, implying a substantial import reliance and a modest export base. The current account balance stands at 4.55% of GDP in 2024, suggesting a positive external balance that could reflect income or services receipts alongside trade, though the data do not specify the composition. Foreign direct investment net inflows are 0.169% of GDP in 2024, pointing to a relatively modest investment climate and room for improvement. Governance indicators—low regulatory quality (−0.661) and weak government effectiveness (−0.808), together with a negative control of corruption (−0.508) and rule of law (−0.463)—signal constraints to business environments and reform capacity. Nonetheless, the economy benefits from a hydropower-based energy profile: renewable energy accounts for 73.7% of total final energy consumption (2021), offering potential for energy security and future export opportunities if investment and policy frameworks strengthen. High-technology exports are small (about $3.8 million in 2022), and poverty remains a challenge at 20.3% (2022), underscoring the need for structural reforms, diversification, and inclusive growth strategies that raise productivity and livelihoods.

Trade and Investment

Nepal’s trade structure reveals limited external orientation, with exports at 7.62% of GDP and imports at 32.9% of GDP in 2024, reflecting a sizable trade deficit and dependence on foreign inputs. The positive current account balance of 4.55% of GDP in 2024 suggests that the country benefits from net external income or services, but the exact drivers are not specified in the data. Foreign direct investment remains modest, at 0.169% of GDP in 2024, indicating limited inflows that could be expanded through reforms and improved governance. The economy shows a notable strength in renewable energy, with 73.7% of energy consumption from renewables (2021), pointing to hydropower potential that could attract investment and enable export of electricity if policy, regulatory, and grid-integration challenges are addressed. High-technology exports are minimal (3.8 million USD in 2022), underscoring that Nepal’s tradable sectors are still developing. Overall, Nepal faces a trade and investment landscape characterized by a small export base, a relatively high import reliance, and significant opportunity to leverage hydropower and digitalization to diversify exports and attract capital, provided governance standards and market efficiency improve.

Governance and Institutions

Nepal’s governance landscape in 2023 shows meaningful fragility across multiple dimensions: Political stability and absence of violence/terrorism at −0.226, regulatory quality at −0.661, rule of law at −0.463, and control of corruption at −0.508, with government effectiveness notably weak at −0.808. These negative indicators imply policy volatility, weak enforcement, and limited capacity to implement reforms, which can deter investment and undermine service delivery. The inflation rate of 7.11% in 2023 adds macroeconomic uncertainty for households and firms. Poverty remains a focal concern at 20.3% (2022), underscoring the need for inclusive and transparent institutions that can efficiently deliver health, education, and social protection. Improving governance would involve strengthening the rule of law, enhancing contract enforcement, reducing corruption, and building policy credibility to attract investment and foster productive public services. Given the country’s reliance on hydropower and development programs, better governance could unlock financing, improve project execution, and reduce risk for both domestic and international stakeholders. Without decisive reforms, the existing governance constraints are likely to continue limiting growth, resilience, and equitable development.

Infrastructure and Technology

Nepal’s infrastructure and technology profile shows uneven development with meaningful digital presence yet persistent gaps. Internet usage stands at 55.8% (2023), signaling a substantial digital audience but leaving a sizable portion of the population unconnected, which has implications for inclusion, education, and e-services. Healthcare infrastructure remains limited, with hospital beds at 0.39 per 1,000 people (2021) and physicians at 0.867 per 1,000 (2021), highlighting a bottleneck in service delivery and workforce capacity. On the energy front, renewable energy accounts for 73.7% of total final energy consumption (2021), reflecting hydropower dominance and a potential asset for energy security and export opportunities, provided investments in transmission, storage, and grid reliability keep pace. The per-capita emission profile is moderate (1.91 t CO2e in 2023), consistent with a lower-middle-income economy with a smaller industrial footprint. Water stress is relatively low by the measure used (freshwater withdrawal at 8.31% of available resources in 2021), indicating ample water resources; yet climate and demand growth will require careful water management and infrastructure planning. Taken together, Nepal’s infrastructure and technology landscape presents a clear opportunity to accelerate progress through targeted investments in connectivity, healthcare capacity, and hydropower integration, while addressing governance barriers that currently hinder faster progress.

Environment and Sustainability

Nepal’s environmental and sustainability indicators reveal a country with abundant natural resources and a relatively low per-capita carbon footprint. Renewable energy consumption reaches 73.7% of total final energy consumption (2021), highlighting the strength of hydro-based energy and the potential for low-emission growth pathways. Total greenhouse gas emissions per capita excluding LULUCF are 1.91 t CO2e (2023), indicating a modest emissions profile in line with a resource-rich yet low-industrial economy. The Level of water stress is 8.31% (2021), suggesting that Nepal’s freshwater resources are not heavily strained under current withdrawals, though climate change and hydrology shifts could alter this balance. The prevalence of undernourishment is 5.7% (2022), pointing to progress in food security but continuing vulnerability to climate risks and agricultural productivity. A poverty headcount of 20.3% (2022) intersects with environmental outcomes, underscoring the need for climate-smart agriculture, sustainable land and water management, and inclusive growth to secure livelihoods. The current account surplus and renewable energy potential present an opportunity to pursue green growth, but expansion should be balanced with ecosystem protection and biodiversity conservation to maintain resilience against climate- and disaster-related shocks.