Nepal Received Rs 1.62 Trillion in Remittances in Six Months — But Capital Budget Spending Stands at Just 15 Percent

NEPAL RECEIVED RS 1.62 TRILLION IN REMITTANCES IN SIX MONTHS — BUT CAPITAL BUDGET SPENDING STANDS AT JUST 15 PERCENT

 

KATHMANDU, February 17, 2026 — Two numbers released this week tell the story of Nepal's economy more clearly than any political speech.

 

The first: Nepal's remittance inflows reached Rs 1.62 trillion during the first six months of fiscal year 2082/83, according to Nepal Rastra Bank. That is a 39.1 percent increase compared to the same period last year — equivalent to USD 7.50 billion in just half a year. In January 2026 alone, Nepal received Rs 192.62 billion in remittances. Foreign exchange reserves have climbed to Rs 3.242 trillion as a result, providing a cushion against import costs and exchange rate pressure.

 

The second: The government spent just 15.62 percent of its capital development budget in the first seven months of the same fiscal year, according to the Financial Comptroller General Office.

 

Read those two numbers together and you have Nepal's development paradox in a single sentence: the country is kept economically afloat by the sacrifices of its citizens working abroad, while the government consistently fails to invest that money — or any money — in the infrastructure and opportunities that would allow those citizens to stay home.

 

 

REMITTANCES: A LIFELINE WITH A HIDDEN COST

 

Nepal's remittance economy is one of the most significant in the world relative to GDP. The 39.1 percent increase in inflows this year is welcome news for household finances, for the stability of the Nepali rupee, and for the foreign exchange reserves that underpin the country's ability to finance imports of fuel, medicine, and goods.

 

But economists are quick to note the double-edged nature of this growth. Remittance growth means more Nepalis working abroad — predominantly in the Gulf, Malaysia, and other destinations. Each rupee sent home represents a worker separated from their family, often in difficult conditions, choosing migration because Nepal itself could not offer comparable wages or opportunity.

 

"Despite these strong external indicators, economists note that domestic capital expenditure remains low and private sector credit growth has not met expectations," Nepal Rastra Bank analysts noted in their latest briefing.

 

The challenge is not just economic. It is demographic and social. Entire villages in Nepal's hills and Terai have been hollowed out by male migration. Children grow up without fathers. Women manage households alone for years at a time. The social infrastructure of communities slowly erodes, even as the financial remittances flow in.

 

 

CAPITAL BUDGET: THE FAILURE THAT REPEATS EVERY YEAR

 

Nepal's chronic inability to spend its own development budget is not news. It is an annual ritual of failure that has persisted across every government, every political configuration, and every economic strategy of the past two decades.

 

The pattern is consistent: the government announces an ambitious capital budget at the start of the fiscal year, spending crawls through the first eight months due to procurement delays, bureaucratic bottlenecks, project preparation failures, and political interference, and then a scramble of rushed, often poor-quality spending erupts in the final months to avoid returning funds to the treasury.

 

At 15.62 percent after seven months, this year is tracking at exactly the same dismal pace.

 

The consequences are not abstract. Every unspent rupee in the capital budget is a road not built, a health post not constructed, a water system not installed, an irrigation canal not completed. It is the physical infrastructure that would enable the agricultural productivity, commercial activity, and basic services that could make rural Nepal livable and economically viable — and that could, in turn, slow the migration exodus.

 

The World Bank recently launched Nepal's Fiscal Dashboard, an online tool designed to provide real-time public visibility into Nepal's public financial management. The dashboard is a useful transparency tool. But transparency without accountability produces very little change on its own.

 

 

STOCK MARKET: A MIXED SIGNAL

 

The Nepal Stock Exchange (NEPSE) index declined by 12.58 points in early February, closing at 2,683.15 points — a 0.46 percent drop, with total turnover of Rs 8.631 billion. The Sensitive Index fell 0.53 percent to 456.71 points. Of 13 sectors, only three recorded gains, led by Hotel and Tourism at 1.79 percent, while finance, commercial banks, and development banks all fell.

 

The market's mixed signals reflect broader uncertainty about the economic direction Nepal will take after the March 5 election.

 

 

GOVERNMENT TARGETS EMPLOYMENT: THE INTEGRATED NATIONAL FINANCING STRATEGY

 

On a more positive note, the Government of Nepal last week launched its Integrated National Financing Strategy for Pro-Employment Growth, aimed at aligning public and private finance with national development priorities and accelerating job creation. The strategy identifies employment generation as a primary objective, with specific focus on channelling investment into productive sectors of the economy.

 

Whether this strategy translates into action depends on which government inherits it after March 5 — and whether that government can break the decade-long pattern of ambitious plans and negligible implementation.

 

 

WHAT THE ELECTION PARTIES ARE PROMISING

 

Every major party contesting the March 5 election has made employment and economic development central to its campaign. The Nepali Communist Party promises 1.5 million formal jobs in five years. Ujyaalo Nepal Party targets 9 percent annual GDP growth. CPN-UML promises to prioritise economic development and service delivery.

 

These are familiar pledges. What is less familiar — and what voters and civil society should demand — are credible implementation plans that explain not just what will be built, but how procurement will be reformed, how bureaucratic bottlenecks will be cleared, and how capital budget utilisation will finally be brought in line with the country's development needs.

 

Until Nepal can spend its own development budget, the remittances of millions of migrant workers will remain the most reliable driver of economic stability — a reality that is both a testament to the resilience of ordinary Nepalis and an indictment of every government that has failed to give them an alternative.