The Ministry of Finance has projected that revenue collection will be affected in fiscal year 2026/27 due to the Bhotekoshi floods, border closures and tax exemptions. The government is expected to face additional pressure on its resources as relief and reconstruction costs rise.
The floods have affected an estimated 431 megawatts of electricity generation, equivalent to around 10 percent of Nepal’s total installed capacity. Damage to tourism and infrastructure has created reconstruction needs estimated at around 11 percent of gross domestic product (GDP), or Rs 723 billion.
Although the government had set a growth target of 7 percent for the current fiscal year, meeting the target now appears unlikely. The World Bank has projected growth of 3.7 percent, the Asian Development Bank 4.1 percent, and the Finance Ministry 3.5 to 4 percent.
The ministry expects inflation to remain within the targeted range. Meanwhile, the National Statistics Office had earlier estimated that Nepal’s economy grew by 3.85 percent in fiscal year 2025/26.
