Euromoney Country Risk


Read the latest analysis on sovereign, geo-political and structural risk

Get up to date country risk ratings in 186 countries

Member login

Lost your password?

Euromoney Country Risk

Euromoney Country Risk
List of countries.

Nepal Nepal

Overview Change score Analyses Experts
Sponsored section
Nepal – Quick View
ECR score26.42 (Mar 2011)
ECR rank147 (Mar 2011)
GDPUSD 15.91 billion
GNI per capita PPPUSD 1,201
FDI inflowUSD 38.18 million
Inflation 200913.23%
Central bank assetsUSD 3,783,797,611.91
Unemployment rate2.1%
Government surplus2.89% of GDP
Tax revenueUSD 0.38 billion
Government typeRepresentative Democracy
Recent political crisisNA
Economic freedom score146th
Freedom of information score119th
Corruption perception index146th
Birth rate28.4 per ‘000
Population balanceUnder 14 – 36.5%
Population balanceAbove 60 years – Men 6.6%
Population balanceAbove 60 years - Women 5.6%
Life expectancy yearsMale 65.9 years
Life expectancy yearsFemale 67.2 years
Mortality rate8.7 per ‘000
Literacy rate63.2%
Internet access2.2%

[Top] Economic Overview

Nepal’s economy is primarily dependant on agriculture and is one of the poorest countries in the world. Nepal is dependent on foreign assistance for financing its budget and for projects. The main exports include carpets, clothing, leather goods, jute goods and grain.


Gross domestic product (GDP)

The GDP at current prices in 2009/10 was NPR 1,182.68 billion  compared to NPR 991.32 billion in 2008/09.

(Source: National Statistics)


Nepal GDP and GDP Growth Rate

(Source: National Statistics, National Statistics)

Nepal's GDP at constant prices in 2009/10 was NPR 619.03 billion compared to NPR 591.93 billion in 2008/09.

(Source: National Statistics)

Nepal's GDP grew at 3.53% in 2009/10 compared to 3.95% in 2008/09.

(Source: National Statistics)


GDP composition by sector



Nepal GDP Composition by Sector

Gross national income

The GNI at current prices in 2009/10 was NPR 1,195.12 billion compared to NPR 1,003.07 billion. The GNI per capita at current prices in 2009/10 was NPR 42,291.

(Source: National Statistics)

The GNI per capita at PPP was USD 1,201 in 2010.

(Source: UNDP)

In 2009/10, total imports of goods and services amounted to NPR 450,193 million compared to NPR 342,536 million. Exports in 2009/10 were NPR 109,140 million compared to NPR 122,737 million the previous year.

(Source: National Statistics)

Income tax

Income tax on Individual incomes in Nepal is taxed progressively to a rate of 25%.

Tax rates for resident individuals

Tax Slabs (NPR)

Tax rates

0 - 160,000


160,001 - 260,000

15% + NPR 1,600

Above Rs. 260,000

25% + NPR 1,600



Corporate tax rate

Corporate tax is charged at the rate of 20%-30%. The standard rate of VAT in Nepal is 13%.


Inflation rate

The inflation rate in 2010 was 10.51% compared to 13.23% in 2009.



Nepal Inflation Rate

(Source:  IMF)

FDI Inflow

In 2009, FDI inflows amounted to USD 38,176,181 compared to USD 995,124 in 2008.

(Source: World Bank)


Banking sector assets

The table below displays the assets of the Central Bank of Nepal.

Currency Unit: NPR

Balance Sheet – Assets of Central Bank of Nepal (NPR)




Foreign Currency Financial Assets



Other Assets



Local Currency Financial Assets



Other Assets



Total Assets



(Source: CentralBank of Nepal)

[Top] Financial Indicators & Government Financial

Consumer price index

The CPI in 2010 was 184.12 compared to 166.61 in 2009.


Nepal Consumer Price Index
(Source:  IMF)

Base year 2000 = 100

Interest rates on saving deposits/time deposits

Interest Rates as of Feb 2010 (%)

Deposit Rates

Savings Deposits Rates

2.0 - 8.0

Time Deposits

1 Month

1.5 - 7.25

3 Months

1.5 - 9.5

6 Months

1.75 - 9.75

1 Year

2.5 - 11.0

2 Years and Above

2.75 - 11.5

(Source: Central Bank of Nepal)


Money supply

Money supply (NPR million)


As of July 2010

As of July 2009

Money Supply (M1)



Broad Money (M2)



Broad Money Liquidity (M3)



(Source: Central Bank of Nepal)

Government expenditure

The total government expenditure in 2009/10 was NPR 248,374.2 million which increased compared to the previous year where it was NPR 206,692.4 million.

Expenditure of Government of Nepal (NPR million)


2009/10 (E)








Principal Repayment



Others (Freeze Account)



Total Expenditure



(Source: Central Bank of Nepal)

Official exchange rate



Nepal Exchange Rate
(Source: Central Bank of Nepal)

NPR per US dollar rate in 2009/10 was 75.45.


Government finances

Fiscal balance

In 2009/10 the government registered a deficit of NPR 39,083.50 million compared to a deficit of NPR 34,356.10 million in 2008/09.


Nepal Fiscal Balance
(Source: Central Bank of Nepal)

Total revenue

The total revenues in 2009/10 amounted to NPR 209.290.7 million compared to NPR 172,336.3 million in 2008/09.

Revenues of Government of Nepal (NPR million)


2009/10 (E)





Foreign Grants



Non-Budgetary Receipts









Local Authority Accounts



Total Revenue



(Source: Central Bank of Nepal)


Tax revenue

Tax Revenue, 2008/09 (NPR billion)

VAT revenue


Customs revenue


Excise revenue


Income tax revenue


(Source: Central Bank of Nepal)

Total grants

The total grants received in 2009/10 amounted to NPR 24,854.30 million compared to NPR 24,400.5 million in 2008/09.



Nepal Total Grants
(Source: Central Bank of Nepal)


Current account balance

The current account surplus in 2010 was 2.89% of GDP compared to a surplus of 4.16% in 2009.



Nepal Current Account Balance
(Source: IMF)

Balance of payments

Balance of Payments (NPR million)


2009/2010 (7 months)


Current Account



Capital Account (Capital Transfer)



Financial Account (Excluding Group E)



Miscellaneous Items, Net



Reserves and Related items



Changes in reserves



(Source: Central Bank of Nepal)


[Top] Labour Force and Employment Overview

The total labour force in 2009 was 13.3 million people. The labour force participation rate in 2009 for men and women was 80% and 63% respectively.

(Source: World Bank, World Bank, World Bank)

According to the 2008 National Labour Force Survey (NFLS), 11.78 million people were employed. The employed population included 5.52 million men and 6.26 million women. The employment to population ratio in 2008 was 81.7; for men and women this was 85.5 and 78.5 respectively.

According to the 2008 NFLS report, 253,000 people were unemployed corresponding to an unemployment rate of 2.1%. The male unemployment rate was 2.2% and female unemployment rate was 2.0%. The unemployed rate in urban and rural areas was 7.5% and 1.2% respectively.

(Source: Central Bank of Nepal)

Minimum wage

The average monthly earnings of employees in 2008 was NPR 5,117. The average earnings for men and women were NPR 5,721 and NPR 3,402 respectively.

The minimum wage for a 19-year old worker or an apprentice is approximately USD 60.8 per month.

(Source: Central Bank of Nepal,

Level of unionisation

The main trade union federations in Nepal are:

  • Democratic Confederation of Nepalese Trade Unions (DECONT)
  • General Federation of Nepalese Trade Unions (GEFONT)
  • Nepal Trade Union Congress-Independent (NTUC)



[Top] Political Stability

Nepal has a representative democracy as a form of government. Nepal was governed by a monarch until 2006, when the parliament voted to abolish the powers of the King. All the powers of the King were transferred to the prime minister.

Maoist rebels in Nepal started campaigning against the monarchy in 1995. The decade long civil war resulted in the death of over 12,000 people. In 2006, the Maoists agreed to a peace deal with the parliamentary government. In the 2008 elections, the Maoists were the largest parliamentary party. After the monarchy was abolished, the Maoist-led government took charge of Nepal.

The President is the head of state and the prime minister is the head of the government.

The parliament is unicameral with a statutory requirement of 601 members. 575 of the 601 members are directly elected and 26 are appointed by prime minister from minority groups. The term for all members of parliament is two years.

(Source: IPU)

The main political parties in Nepal are:

  • United Communist Party of Nepal-Maoist (UCPN-M)
  • Nepali Congress (NC)
  • Communist Party of Nepal-United Marxist Leninist (CPN-UML)
  • Madhesi People's Rights Forum (MPRF)
  • Madhesi People’s Right Forum-Democratic (MPRF-D)
  • Tarai Madhes Democratic Party (TMDP)
  • Sadhbavana Party (SP)
  • Rastriya Prajatantra Party (RPP)



Regulatory environment

Nepal is ranked 146th in the 2011 Index of Economic Freedom. In the Asia-Pacific region, Nepal ranks 33rd out of 41 countries. Nepal's economic freedom score is lower than the regional and world averages.



Nepal Economic Freedom Indices

Corruption perception

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Nepal is ranked 146th on this list which indicates that the corruption levels in the public departments in Nepal is high.

Nepal has slipped in the CPI rankings since 2009 – it was ranked 143rd with a score of 2.3 which indicates the perceived levels of corruption have increased in Nepal.


Freedom of information

Nepal is ranked 119th in the World Press Freedom Index 2010 with a score of 36.38 which indicates that media in Nepal is restricted.



  • The Kathmandu Post
  • The Rising Nepal
  • Gorkhapatra
  • Kantipur
  • Annapurna Post
  • The Himalayan Times
  • The Nepali Times


(Source: BBC)

Judicial system


The judicial system in Nepal includes:

  • The Supreme Court
  • The Court of Appeal
  • The District Courts
  • Judicial Council
  • Judicial Service Commission


The Supreme Court is the highest court in Nepal. It consists of a Chief Justice of Nepal and ad hoc Judges. The Supreme Court has both judicial and extra judicial powers. The judicial powers include the power of hearing the writ petitions, the power of hearing appeals, the power of reviewing its own judgments, the power to revise the judgments delivered by the Court of Appeal and the power to try certain cases (as specified by law).

The Court of Appeal is at the second tier in the hierarchy of courts in Nepal. Sixteen Courts of Appeal have been established under the Supreme Court.

The District Courts are the courts of first instance. Judges of the District Courts are appointed by the Chief Justice on recommendation of the Judicial Council.

The responsibilities of the Judicial Council include making recommendations for appointments, transfers, disciplinary action and the dismissal of judges. The Judicial Service Commission consists of the Chief Justice of Nepal, the Minister of Justice, senior-most judge of the Supreme Court, Chairman of the Public Service Commission and the Attorney General of Nepal.


[Top] Demographic Overview

The total population of Nepal for the year 2007 was 26.43 million. Of the total population, 13.19 million were females and 13.24 million were males.

(Source: National Statistics)

 Nepal Population by Gender

The gender ratio in the country is unbalanced i.e. there are about 90 males for every 100 females in the country.

(Source: National Statistics)

Individuals aged below 14 years of age accounted for 36.5% of the total population and the population above 60 years of age included 5.6% males and 6.6% females.

(Source: UN)


The median age of the population increased from 18.6 years in 1990 to 21.6 years in 2010.

(Source: UNDP, page: 195)

The mortality rate of infants (per 1,000 live births) was registered at 42.2 for the period 2005-2010. As of 2006 the crude birth rate was 28.4 (per 1,000) and crude death rate was 8.7 (per 1,000).

The life expectancy at birth for the total population is 63.3 years. The life expectancy in for males and females is 62.9 years and 63.7 years respectively.

(Source: National Statistics)

International migrant stock till mid 2010 was recorded at 945,900 people. This was approximately 3.2% of the entire population.

(Source: UN)

The urban population in the country grew at an annual rate of 4.9% between 2005 and 2010. For the same period, the rural population grew at a slower rate of 1.4%.

(Source: UN)

Ethnic groups in Nepal include:

  • Brahman
  • Chetri
  • Newar
  • Gurung
  • Magar
  • Tamang
  • Rai
  • Limbu
  • Sherpa
  • Tharu


The country ranks 138th out of 169 countries on the Human Development Index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

(Source: UNDP)

[Top] Soft Infrastructure


In 2008 the literacy rate was 63.2%. 74.7% of the male population was literate and 53.1% of the females population was literate.

The adult literacy rate in 2008 was 55.6%. The adult literacy rate in urban and rural areas was 77.2% and 51.1% respectively. The adult literacy rate for men and women was 70.7% and 43.3% respectively.

Education is not compulsory in Nepal. The government provides free education till the sixth grade; however, this policy has not implemented. There is also a shortage of educational resources including schools and teachers.

(Source: National Statistics,

Health care

According to WHO statistics, Nepal had 2.1 physicians (per 10,000 people) and 4.6 nurses and midwives (per 10,000 people). The health care workforce in Nepal is lower than the regional average.

The main causes of deaths in children below the ageof 5 is birth asphyxia, prematurity and diarrhoea.

The per capita expenditure on health was approximately USD 52 in 2006. The health care expenditure as a percentage of GDP was 5.1% in the same year.

(Source: WHO,

[Top] Hard Infrastructure

Nepal is a landlocked country with mountainous terrain. The railway network is not very developed and ther are very few urban transports services. The main mode of transportation is road travel.


Nepal has approximately 17,282 km of roads, of which 60.3% are paved. The roads in the Nepal are generally in poor condition.


There are 57 km of railways of which 53 km are operated by Nepal Railways Company and the remaining are operated by Indian Railways.

(Source: National Statistics,,


Nepal has no ports.

(Source:world port source)


There are 47 airports of which 11 have paved runways. nepal has only one international airport which is Tribhuvan International airport.



Airport name

Runway length (ft)














Tribhuvan Intl

















(Source: Air charter world)

Telecommunications networks

In 2010, the internet penetration rate was 2.2% with 625,800 internet users.

The number of mobile phone subscriptions in 2009 was 19.09 per 100 and there were 2.77 fixed telephone lines per 100 people.


Euromoney country risk banner
All material subject to strictly enforced copyright laws.
© 2019 Euromoney Institutional Investor PLC.