Travel Services Deficit Shrinks as Nepali Tourism Recovers in 2025/26

Nepal’s travel-related deficit narrowed notably in the first month of FY 2025/26 as the tourism sector continued its post-crisis rebound. According to the latest Balance of Payments (BoP) data from Nepal Rastra Bank, the travel services deficit fell to USD −117.2 million, an improvement from USD −130.9 million recorded in the same month of the previous fiscal year.

The improvement was driven by rising inbound tourism receipts and slower growth in outbound spending. Travel income grew to USD 38.6 million, while Nepali residents spent USD 155.8 million abroad. This marks the strongest recovery since the COVID-19 downturn, supported by an increase in Indian and Chinese tourists and a revival in domestic hospitality businesses.

Officials attribute this rebound to higher tourist arrivals following improved air connectivity, expanded hotel capacity, and aggressive marketing by the Nepal Tourism Board. The revival of mountaineering expeditions and trekking activities also boosted foreign exchange earnings during the start of the fiscal year.

However, analysts caution that outbound education and medical travel remain heavy drains on foreign currency. Spending on education alone stood at USD 102.8 million, accounting for nearly two-thirds of total travel outflows. Economists emphasize that sustainable tourism growth and domestic education investment are key to further narrowing the travel deficit.