South Asia's Economic Growth Weakens, Nepal's Growth Projection Falls to 4.5%: World Bank

According to the latest World Bank report, South Asia's economic growth is expected to remain subdued due to global economic uncertainties. The region's growth is projected at 5.8% in 2025 and 6.1% in 2026. In Nepal, factors such as floods, landslides, and financial weaknesses have led to a projected growth rate of 4.5% for 2024/25 and 5.2% for 2025/26.

The report highlights that despite high tax rates across South Asia, revenue collection remains weak, adversely affecting government finances. In Nepal, ineffective tax collection has posed challenges for development spending and public services.

The World Bank recommends reforms in the tax system, eliminating unnecessary tax exemptions, increasing the use of digital technology, and regulating the informal sector to improve revenue collection. These measures could enhance economic stability and boost government revenue.

Experts urge the Nepalese government to implement these recommendations to accelerate economic growth. Failure to do so could lead to slower job creation and hinder development projects, the report warns.