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Challenges in Nepalese Economy

  • Continued low economic growth,
  • Structural problems in the economy,
  • Shrinking of the productive industry sector and the declining contribution of the secondary sector
  • The expansion of the tertiary sector without a solid foundation of the primary and secondary sectors,
  • Low production and productivity,
  • Increasing cost of production and weak competitiveness,
  • Increasing aversion to agriculture and dependence even on basic food items,
  • Consumption-oriented imports and low export capacity and high trade deficit,
  • Growing youth outward migration for foreign employment due to limited internal employment opportunities
  • Fragmented social security programmes, increasing liabilities, poor management and low security perception;
  • Education system not connected with production system, problems of quality and punctuality in higher education, poor human resource management,
  • Weak public health system with low access to even basic health services by ordinary citizens,
  • Mismatch in demand and supply of infrastructure, poor management of dimensions of sustainable infrastructure development and Poor quality of physical infrastructure built,
  • Lack of reliable, safe and affordable modern information technology and increasing security challenges.
  • Huge gap between the demand and supply of urban infrastructure and service facilities and unorganized urbanization, integrated population development and relocation programs that have not been effective,
  • Change in the form of violence against women, children, senior citizens and marginalized communities, economic-social-cultural discrimination and continuation of traditional thinking,
  • Gaps between policies, practices and outcomes related to inclusion;
  • Weak interconnection between state levels, low progress towards achieving inclusive, equitable and balanced regional development through a strong federal governance system,
  • Gap in public spending needs and resource mobilization capacity, large share of import-based revenue, uncertain public finance system and challenges in implementing fiscal federalism.
  • Low capital allocation and low spending capacity, uncontrollable costs and delays in construction of infrastructure projects, low returns compared to costs,
  • Mobilization of financial resources between limited persons and entrepreneurs; Not reaching the expected contribution to production and job creation from the financial resources in circulation,
  • Weak market competition, increase in informal transactions and revenue and capital leakage, abnormal fluctuations in liquidity, prices and supply,
  • Increasing citizens’ complaints about the quality of public service delivery and security arrangements, corruption control, guaranteeing social justice and speedy justice,
  • High environmental impact, mitigation of the effects of climate change and the challenge of adopting sustainable development and green economy.
  • Management of the challenges that come with the achievements created by upgrading in developing countries, management of resources necessary for sustainable development goals and effective implementation.

Source: Nepal Planning Commission, 16th periodic plan