Despite significant obstacles, the situation in Nepal improved steadily during the reporting period. Post-pandemic, Nepal’s leadership learned a variety of lessons and seemed to have improved its state capacity. In 2022, it conducted local, provincial and national elections that were all free and fair and let to the formation of a government.

Economically, Nepal is beginning to recover from the impacts of the COVID-19 pandemic but still faces challenges due to a difficult global macroeconomic environment. Although the government has managed to keep inflation relatively low, unemployment has risen slightly and tax revenues have fallen.

Although poor governance structurally contributed to poverty and economic stagnation, recent years provide hope for Nepal’s future. While its steering capability and resource efficiency remain relatively poor, it has made infrastructural advancements lately.

Show country report