Himal Press 
KATHMANDU: The World Bank has recommended that Nepal take policy actions in four critical areas – getting more out of migration, improving export performance, harnessing the potential of hydropower and boosting the digital sector – to unlock its economic potential.
A World Bank report titled ‘Nepal Country Economic Memorandum: Unlocking Nepal’s Growth Potential’ released on Monday states that Nepal has achieved remarkable success in poverty reduction, nearly eradicating extreme poverty, largely driven by remittances.
Despite progress, Nepal’s economic growth lags regional peers, according to the World Bank. Nepal’s economy grew at an average annual real rate of just 4.2% between 1996 and 2023, ranking sixth out of eight South Asian nations.
The World Bank report states that structural challenges such as low productivity, declining exports, and a stagnant industrial sector have held back the economy and led to slow job creation in non-agriculture sectors. Young workers are migrating abroad in search of better job opportunities as domestic prospects remain limited, it added.
“Nepal’s success in poverty reduction is impressive, but its economic potential remains largely untapped,” said David Sislen, World Bank Division Country Director for the Maldives, Nepal, and Sri Lanka. “Nepal has significant potential to drive stronger growth and create jobs by implementing key reforms to increase the returns from migration, boost exports, use hydropower efficiently and boost digitalization.”
Dr Shiva Raj Adhikari, the vice chairperson of the National Planning Commission, said Nepal’s 16th Plan has outlined a vision of good governance, social justice and prosperity, and prioritizes productivity and competitiveness, decent and productive jobs, social security and ensuring a smooth transition from LDC status. “The government is committed to ensuring an enabling policy environment for Nepal’s sustainable growth,” he added.
