Beyond Remittances

Nepal’s economic track remains constrained by a growth model that has been overly dependent on remittances and consumption. Though remittances have uplifted millions of people out of extreme poverty, this model has failed to generate effective job or productivity enhancement. The latest economic assessment made by the World Bank shows the harsh reality of Nepal’s economy, which is resilient but stagnating. Due to structural inefficiencies and policy inertia, the economy is unable to reach its full potential. Remittance inflows have caused deeper economic vulnerabilities for decades. Most of the young workers migrate in search of better opportunities and the domestic labour force continues to shrink, limiting the country’s ability to develop robust industries.