Nepal’s economy is expected to grow by 3.3% in FY24, driven by revived tourism and a pickup in hydropower exports. On the demand side, private consumption will drive growth, supported by a substantial increase in remittance inflows, according to the World Bank’s twice-a-year country development update. The latest Nepal Development Update, Nepal’s Economy on a Recovery Path, but Private Investment Remains Low, projects a further rebound in growth of 4.6% in FY25. However, the forecast is subject to multiple risks, including a growth slowdown in partner countries, notably India, Gulf countries, and Malaysia which could lead to a drop in remittances and tourism. Further business environment reforms aimed at attracting more private investment will be needed to support medium-term growth.