Bagmati Province Sees 1.98% Wage Growth Amid Economic Pressures

In FY 2024/25, Bagmati Province, the economic hub of Nepal with the highest weight in the Salary and Wage Index (31.89%), recorded a 1.98% wage growth, taking its index to 102.36 in mid-July 2025 from 100.38 a year earlier. While this represents a steady increase in earnings, it is below the national average growth of 2.63%, reflecting the economic pressures and cost constraints in the province.

Despite being home to major business, service, and government sectors, Bagmati’s wage growth remains modest compared to faster-growing provinces like Sudurpaschim (+7.44%), Lumbini (+3.72%), and Karnali (+3.09%). This slower pace suggests that while Bagmati offers more job opportunities, wage increments are not keeping up with rising living costs, particularly in Kathmandu Valley, where expenses on housing, transportation, and services continue to climb.

The province had previously recorded a stronger rise of 4.22% between 2022/23 and 2023/24, but the slowdown to under 2% now highlights tightening business margins and cautious salary adjustments by employers. For workers, this means real wage growth may lag behind inflation, reducing disposable income and straining household budgets.

As the economic center of Nepal, Bagmati’s modest wage growth indicates that employers are under cost-control measures despite a recovering economy. Policymakers may need to address this gap to ensure wages in the capital region better reflect living costs and economic productivity.