Nepal is a founding member of the SASEC Program, joining with Bangladesh, Bhutan and India in 2001 to form this project-based partnership. Maldives and Sri Lanka became full members of SASEC in May 2014, following several years as active observers.

Nepal's new constitution, proclaimed in 2015, paves the way for rapid and inclusive economic growth. The Fifteenth Plan 2020/21–2024/25 aims to generate employment and achieve minimum average economic growth of 9.4% per annum. Nepal's vision for 2030 is helping the country work toward graduation from its least developed country status by 2022, achieving the Sustainable Development Goals, and becoming a middle-income country by 2030.

SASEC Projects in Nepal

Since 2005, the Government of Nepal has signed 22 ADB-financed SASEC investment projects worth around $3.01 billion.

Nepal: SASEC Projects
Source: SASEC Project Portfolio, as of March 2023

Source: SASEC Project Portfolio, as of March 2023

In addition to the projects, ADB-financed technical assistance has supported SASEC investment projects in Nepal, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of 25 national technical assistance projects (worth over $27.43 million) have assisted Nepal in project preparation, strategic planning, and capacity building.

Trade Snapshot

Direction of Intra-regional Trade

The value of Nepal's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2022, is captured in the tables below.

Nepal's top import source worldwide is India, with imported goods valued at around $6.5 billion.

India is Nepal's largest export market worldwide, with exports valued at $648 million. Bangladesh is its 13th top export market, with exports valued at $5 million.

Nepal Trade - Import

Source: IMF Direction of Trade Statistics, accessed May 2022

Nepal Trade - Export

Source: IMF Direction of Trade Statistics, accessed May 2022

Logistics Performance Index (LPI)

Nepal's overall LPI score for 2018 is 2.51, a significant improvement from its 2016 score of 2.38 and only slightly below the South Asia regional average of 2.51. The country climbed 10 spots to 114 out of 168 economies, from 124th place in 2016. Improvements in customs efficiency, customs clearance procedures, trade-related infrastructure, and ease of doing cross-border trade account for the improved score for Nepal.

Nepal LPI 2018

Source: World Bank LPI (accessed December 2018)

Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.

Economic Outlook

Asian Development Outlook

Fiscal stimulus and wider COVID-19 vaccination coverage will support growth in Nepal, projected at 3.9% in fiscal year (FY) 2022. Recovery in tourism will be delayed owing to slow growth in advanced economies. GDP growth is projected at 5.0% for FY2023, provided that the eligible population is vaccinated and the growth momentum holds. Inflation is projected to slow to 6.2%.

Source: Asian Development Outlook 2022 (ADB)
South Asia Economic Focus

Growth forecast in Nepal is projected at 5.1% in FY2022-2023 with the normalization of monetary policy in the country. The tourism sector continues to bounce back from the slowdown caused by the coronavirus (COVID-19) pandemic, though tourist arrivals are still below January 2020 level. Current account deficits remain owing to slow recoveries of remittance inflows and service exports.

Source: South Asia Economic Focus, Fall 2022 (WB)