Gross National Income in Nepal: Rising or Flattening in 2082/83?

Published on September 24, 2025

Nepal’s Gross National Income (GNI) has experienced both strong growth and periods of moderation over the last five years. GNI, which measures the total income earned by residents including net income from abroad such as remittances, expanded significantly by 14.4% in FY 2021/22, reflecting robust remittance inflows and post-COVID recovery momentum. However, since then, the pace has flattened. Growth slowed to 8.5% in FY 2022/23, further declined to 6.9% in FY 2023/24, and is projected at 6.7% in FY 2024/25. This clear trend indicates that while GNI continues to rise in absolute terms, the rate of growth is flattening, suggesting a maturing income structure with limited acceleration compared to earlier years.

The slowdown is not due to weaker remittances, which have remained strong, rising from Rs. 961 billion in FY 2020/21 to Rs. 1,723 billion in FY 2024/25. Instead, the flattening trend reflects challenges in expanding domestic income sources, particularly from production, services, and investment. The reliance on remittances has cushioned Nepal’s external position—helping sustain household consumption and foreign exchange reserves—but it also highlights structural vulnerabilities. Without significant domestic job creation and productivity-driven growth, GNI may struggle to regain the double-digit growth rates seen earlier.

Looking forward to FY 2082/83, Nepal’s GNI is likely to continue rising in absolute numbers, but at a moderate pace of 6–7% annually. This provides stability but not the dynamism needed for rapid income transformation. The policy challenge is to move from a remittance-dependent economy toward one that generates income through domestic capital formation, industrial expansion, and export diversification. Sustaining remittance inflows is important, but long-term income growth must be anchored in stronger domestic output and value addition.

Policy Lessons from India: Can Nepal Control Inflation More Effectively?

India has kept inflation relatively moderate through strong agricultural systems, buffer stocks, and inflation-targeting policies, while Nepal has historically struggled with food-driven volatility. Nepal’s CPI fell below India’s in 2025/26 for the first time in four years, but to sustain this trend, Nepal must strengthen supply chains, adopt buffer policies, and set clearer inflation targets.

Inflation Convergence in South Asia: What Nepal-India CPI Data Reveals

Nepal and India’s inflation rates, once far apart, have gradually converged—Nepal’s CPI dropping from 7.74% in 2022/23 to 1.68% in 2025/26, while India’s remained steadier around 2–5%. For the first time in four years, Nepal’s inflation fell below India’s, highlighting both shared regional cycles and unique domestic vulnerabilities.

Nepal vs India: Monthly CPI Comparison and Regional Economic Impact

Nepal’s inflation fell to 1.68% in August 2025/26, below India’s 2.07%, reversing a four-year trend. While both economies share similar seasonal inflation cycles, Nepal’s sharper food-driven spikes contrast with India’s steadier, monsoon-driven patterns. Regionally, this convergence impacts household costs, trade competitiveness, and economic stability.

Inflation Gap Narrows: Nepal’s Deviation with India Falls to -0.39% in 2025/26

In August 2025/26, Nepal’s CPI stood at 1.68%, lower than India’s 2.07%, with the inflation deviation dropping to -0.39% for the first time in four years. While Nepal gained from falling food prices, India’s inflation stayed higher due to agricultural pressures, though both countries continue to face rising service costs.

Cross-Border Inflation Trends: How Nepal and India’s Prices Move Together and Apart

Nepal and India’s inflation trends usually move in sync, reflecting shared regional and global factors. But in August 2025/26, Nepal’s inflation (1.68%) fell below India’s (2.07%) for the first time in four years, thanks to easing food prices in Nepal, while India faced higher agricultural pressures.

Nepal vs India Inflation 2025/26: Why Nepal’s CPI Fell Below India’s for the First Time

In August 2025/26, Nepal’s inflation dropped to 1.68%, falling below India’s 2.07% for the first time in four years. While food price declines drove Nepal’s slowdown, India’s inflation held slightly higher due to agricultural pressures. However, Nepal’s service costs remain a long-term challenge, even as headline CPI looks favorable.