After the 2022 elections, shifting alliances produced three governments within two years, most recently returning K.P. Oli to power in July 2024. Although coalition volatility continued, transitions occurred peacefully and without major disruption, reflecting a maturing democratic process. Public frustration with political churn, however, remained substantial.
Economic recovery gained momentum, with GDP growth rising to 3.9% in 2024 and inflation easing. Yet unemployment increased and tax revenues declined, underscoring structural weaknesses. High remittances and expanding hydropower generation provided stability.
Governance capacity remains limited, constrained by geography, weak institutions and population outmigration. While infrastructure improvements advanced, underutilization and rising debt—particularly from Chinese-funded projects—pose challenges. Border tensions with India and China persist, despite attempts at balanced diplomacy.
