Nepal’s economy is projected to grow by 3.6 percent in fiscal year 2026/27, remaining below 4 percent for the second consecutive year, as rising global oil prices and geopolitical tensions weigh on economic prospects, according to the International Monetary Fund (IMF).
In its latest World Economic Outlook, released on Tuesday, the IMF projected growth to edge up to 3.7 percent in FY 2027/28. Inflation is expected to rise from 3.1 percent in 2026 to 5.8 percent in 2027, after easing from 4.1 percent in 2025.
The IMF warned that escalating conflict in the Middle East could disrupt energy supplies and push crude oil prices above $100 per barrel, with a further escalation potentially raising them to $130. Higher fuel prices could increase transportation and production costs in Nepal, which relies heavily on imported petroleum products.
Globally, economic growth is projected to slow to 3.1 percent in 2026 before recovering to 3.4 percent in 2027. India’s economy is forecast to grow by 7 percent in both years, while the United States is expected to expand by 2.3 percent annually.
The IMF cautioned that prolonged geopolitical tensions, rising commodity prices and renewed inflationary pressure could further weaken global growth, particularly in import-dependent economies such as Nepal.
