Nepal’s rising budgets fail to translate into revenue, spending and growth gains

In recent years, the government has increasingly relied on borrowing not only for development projects but also to cover regular expenses such as salaries, social security allowances and debt servicing.

Nepal’s economy is coming under increasing strain from a widening gap between ambitious budget size, weak revenue collection and persistently low capital expenditure, with economists warning that the country’s growth prospects are deteriorating as the government struggles to spend effectively and raise enough resources.