{
  "title": "Nepal Stabilizes Its Economy—and Sets Its Sights Higher",
  "publication": "IMF News, August 19, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/08/19/nepal-stabilizes-its-economy-and-sets-its-sights-higher",
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  "summary": "Nepal's concerted economic reforms have secured macroeconomic stability after years of shocks. The challenge now is turning those gains into stronger, more inclusive growth",
  "publishDate": "2026-08-19",
  "sections": [
    {
      "heading": "Program achievements and headline outcomes",
      "content": "- Macroeconomic stability secured after years of shocks; IMF-supported arrangement completed (first in nearly two decades).\n- Inflation fell from an average of 7.7 percent in fiscal year 2022-23 to 1.7 percent in the first half of fiscal year 2025-26.\n- International reserves rose from about nine months of import cover to more than twelve months of import cover.\n- Public finances improved: the primary fiscal deficit is lower, the budget gap narrowed sharply, and debt is kept at low risk of distress.\n- Institutional improvements: modernization of central bank monetary policy conduct and improved financial sector oversight."
    },
    {
      "heading": "Key shocks that tested the recovery",
      "content": "- Major earthquake in 2023.\n- Severe floods in 2024.\n- Social unrest \"last year.\"\n- Higher energy prices linked to the war in the Middle East.\n- Combined effect: interrupted the recovery and weighed heavily on job creation."
    },
    {
      "heading": "Durable reforms implemented",
      "content": "- Central bank: modernized monetary policy conduct; moves to strengthen the central bank's legal framework and accountability.\n- Financial sector: stronger bank supervision; review of loan quality; recognition of vulnerabilities in savings and credit cooperatives.\n- Fiscal transparency and management: published financial statements of state-owned enterprises; developed a strategy to mobilize revenues; strengthened public investment planning and management.\n- Governance and compliance: upgraded anti-money-laundering law.\n- Reforms sustained despite government transitions, natural disasters, and global shocks through a consistent policy anchor and capacity development support."
    },
    {
      "heading": "Remaining priorities and policy recommendations",
      "content": "- Foster higher private investment and generate more jobs creation to achieve stronger, more inclusive growth.\n- Continue to strengthen the financial sector, with particular attention to savings and credit cooperatives that serve many people.\n- Deepen institutional reforms and maintain reform momentum to address governance gaps and rebuild public trust.\n- Strengthen social protection and create conditions for stronger, more inclusive growth.\n- Continue the IMF Governance and Corruption Diagnostic as part of efforts to address governance gaps."
    },
    {
      "heading": "Outlook and IMF partnership",
      "content": "- Stability is framed as the foundation for growth, not the finish line.\n- If reforms continue, Nepal will be well placed to raise living standards, create job opportunities, and withstand future shocks.\n- The IMF will remain a steadfast partner as Nepal pursues these goals."
    },
    {
      "heading": "Nepal team mentioned",
      "content": "- Sarwat Jahan, Arpitha Bykere, Melih Firat, Yaroslav Hul, Rekha Ghimire, Pranav Gupta, Paul Leonovich, Saraswti Sharma, Galen Sher, and Yichen Xu.\n\nIMF NEWS, August 19, 2026.\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- ARTICLE IV REPORT\n- NEPAL AND THE IMF\n- PRESS CENTER\n- IMF Country Focus\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/08/19/nepal-stabilizes-its-economy-and-sets-its-sights-higher"
    }
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    "Published: August 19, 2026",
    "Macroeconomic stability secured after years of shocks; IMF-supported arrangement completed (first in nearly two decades).",
    "Inflation fell from an average of 7.7 percent in fiscal year 2022-23 to 1.7 percent in the first half of fiscal year 2025-26.",
    "International reserves rose from about nine months of import cover to more than twelve months of import cover.",
    "Public finances improved: the primary fiscal deficit is lower, the budget gap narrowed sharply, and debt is kept at low risk of distress.",
    "Institutional improvements: modernization of central bank monetary policy conduct and improved financial sector oversight.",
    "Major earthquake in 2023.",
    "Severe floods in 2024.",
    "Social unrest \"last year.\"",
    "Higher energy prices linked to the war in the Middle East.",
    "Combined effect: interrupted the recovery and weighed heavily on job creation.",
    "Central bank: modernized monetary policy conduct; moves to strengthen the central bank's legal framework and accountability.",
    "Financial sector: stronger bank supervision; review of loan quality; recognition of vulnerabilities in savings and credit cooperatives.",
    "Fiscal transparency and management: published financial statements of state-owned enterprises; developed a strategy to mobilize revenues; strengthened public investment planning and management.",
    "Governance and compliance: upgraded anti-money-laundering law.",
    "Reforms sustained despite government transitions, natural disasters, and global shocks through a consistent policy anchor and capacity development support.",
    "Foster higher private investment and generate more jobs creation to achieve stronger, more inclusive growth.",
    "Continue to strengthen the financial sector, with particular attention to savings and credit cooperatives that serve many people.",
    "Deepen institutional reforms and maintain reform momentum to address governance gaps and rebuild public trust.",
    "Strengthen social protection and create conditions for stronger, more inclusive growth.",
    "Continue the IMF Governance and Corruption Diagnostic as part of efforts to address governance gaps.",
    "Stability is framed as the foundation for growth, not the finish line.",
    "If reforms continue, Nepal will be well placed to raise living standards, create job opportunities, and withstand future shocks.",
    "The IMF will remain a steadfast partner as Nepal pursues these goals.",
    "Sarwat Jahan, Arpitha Bykere, Melih Firat, Yaroslav Hul, Rekha Ghimire, Pranav Gupta, Paul Leonovich, Saraswti Sharma, Galen Sher, and Yichen Xu.",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[ARTICLE IV REPORT](https://www.imf.org/en/news/articles/2026/06/08/pr26188-nepal-imf-exec-board-concludes-2026-article-iv-consult-completes-seventh-review-ecf)",
    "[NEPAL AND THE IMF](https://www.imf.org/en/countries/npl)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
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