Datanomics: New Nepal PM faces challenges from graft to economic revival

Nepal has entered a new political phase after youth-led demonstrations forced out the previous government. The protests — mainly fuelled by economic frustrations — culminated in the appointment of former chief justice Sushila Karki as interim prime minister. She begins her term with a promise to fight corruption, which is the foremost challenge in the fragile economy.

 

Corruption and governance pressure

 

Nepal’s global corruption ranking has barely shifted. It ranged from 113-117 from 2019 to 2021, and though it improved slightly to 107 in 2024, the country still lies in the bottom half worldwide. Transparency International, which comes out with the corruption index, noted rising corruption in import/export processes, public services, tax payments, and contracts in 2024 in the country, underscoring why anti-graft anger became the central demand of the GenZ-led protests. 

 

Sectoral composition of Nepal’s economy

 

Services dominate Nepal’s economy, accounting for over 55 per cent of GDP in 2023-24, much of it linked to tourism and hospitality. Agriculture remained steady at 21-22 per cent, while manufacturing lagged at just 4-5 per cent. With the uprising fresh in global headlines, Nepal’s tourism sector, already sensitive to instability, faces new uncertainty. 

 

Remittances as economy’s lifeline

 

Remittances surged to 33.1 per cent of GDP in 2024, up from 

25.3 per cent in 2023. While this supports households, it also unde­r­scores dependence on migrant workers and the abse­n­ce of jobs at home, an imbalance that risks fuelling further discontent among young Nepalis.