CHARACTERISTICS or FEATURES OF NEPALESE ECONOMY (Updated 2024)

CHARACTERISTICS/ FEATURES OF NEPALESE ECONOMY

1. Low Per Capita Income: Nepal has a low per capita income compared to its neighboring countries. The per capita income of Nepal in 2019 was US$ 1085, which increased to approximately US$ 1200 in 2021. As of 2023, the per capita income has risen further to around US$ 1400.


2. Mass Poverty: The estimated poverty headcount ratio was 20.27 percent in 2023, down from 18.7 percent in 2018. Despite some improvement, poverty remains a significant challenge.


3. Underutilization of Natural Resources: Research indicates that various regions in Nepal have mineral deposits. However, due to a lack of modern technology and skilled labor, the country has been unable to fully exploit these resources.


4. High Trade Deficit: Nepal's trade deficit has been increasing every year. The trade deficit in 2019 was NPR 1321.4 billion (arba), and it rose to NPR 1365.5 billion in 2022. This growing deficit is largely due to the substantial increase in imports compared to exports.


5. Dualistic and Mixed Economic System: Nepal has a mixed economic system characterized by the coexistence of traditional and modern sectors. The traditional sector is primarily agricultural, while the modern sector focuses on manufacturing goods and providing services.


6. Rapid Population Growth: Nepal's population has been steadily rising in recent decades, reaching approximately 30 million in 2023. This growth rate has led to increased underemployment. The current population growth rate is 1.36 percent per year.


7. Remittance Economy: Nepal is highly dependent on remittance income. In 2019, remittance income was NPR 879.3 billion (arba), representing a 16.5 percent increase from the previous year. By 2023, remittance income had increased to NPR 1020 billion, highlighting Nepal's growing dependence on income from abroad.