Economic Analysis - Improving Ties With China And India Positive For Economy - MAY 2018


BMI View: Efforts by the Oli government to strengthen bilateral ties with China and restore strained relations with India will be supportive of Nepal's economic growth over the coming years. We forecast growth to average 2.4% over the next five years amid an increase in foreign investment.

We expect efforts by the Khadga Prasad Oli government to strengthen bilateral ties with China and re-establish relations with India to be supportive of economic development plans. In particular, increased foreign direct investment ( FDI) inflows would enable Nepal to develop its underdeveloped infrastructure, aiding transport and communication in the mountainous and landlocked country. We thus maintain our forecast for real GDP growth to average 2.4% over the next five years on the back of increased FDI.

New Government's Close Ties With China To Bode Well For FDI Inflows

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