Kathmandu, 4 Dec: Foreign direct investment (FDI) coming into the country has been decreasing. Looking at the data from the past six years, the investment entering Nepal from various countries has been gradually declining.
According to the report published on Tuesday by the United Nations Conference on Trade and Development (UNCTAD), Nepal received 57 million US dollars in FDI in 2024. This amount is significantly lower compared to the 185 million US dollars received in 2019.
The report also shows that in 2019, Nepal had received 185 million US dollars in foreign investment.
Among the past six years, the highest FDI inflow was recorded in 2021, with 196 million US dollars.
Similarly, Nepal received 740 million US dollars in 2023, and 650 million US dollars in 2022 as foreign direct investment.
Even though the government has introduced policy reforms to attract foreign investment, the data shows that the amount entering the country continues to decline.
According to the report, Nepal received more than 41.5 billion rupees through greenfield projects in 2024.
Global Economy Also Slowing Down
According to RSS, global economic growth is projected to fall to 2.6 percent in 2025, down from 2.9 percent in 2024, a decline of 0.3 percentage points. Increasing financial uncertainty and geopolitical tensions affecting trade and investment are cited as the reason for sluggish growth this year.
According to UNCTAD’s Trade and Development Report 2025, fluctuations in global financial markets influence world trade as strongly as real economic activities, limiting potential opportunities for both developing and developed economies.
The report states that although new technologies like artificial intelligence (AI) offer some benefits, global growth is likely to remain at 2.6 percent in 2026 as well.
As per UNCTAD, these estimates are based on market exchange rates, while OECD’s purchasing power parity (PPP)-based measurements show slightly higher growth rates globally. The OECD predicts 3.2 percent growth in 2025 and 2.9 percent in 2026.
UNCTAD Secretary-General Rebeca Grynspan said that financial conditions are currently the main factor determining the direction of global trade. “Trade is not just a network of suppliers; it is also a complex structure of credit, payment systems, currency markets, and capital flows,” she stated.
The report estimates that developing economies will grow by 4.3 percent in 2025, which is significantly higher than the growth projected for developed economies.
However, high borrowing costs, sudden fluctuations in capital flows, and climate-related risks are hindering developing countries’ financial capacity and opportunities for investment expansion.
Many countries with small financial markets are forced to take external loans at expensive interest rates ranging from 7 to 11 percent, while major developed economies borrow at just 1 to 4 percent.
Countries frequently affected by extreme weather events are estimated to pay about 2 billion dollars more in interest payments each year, intensifying financial pressure due to climate risks.
UNCTAD has proposed a comprehensive series of reforms aimed at reducing financial risks, enhancing stability, and strengthening coordination between trade, finance, and development. These include updating trade rules, improving access to data, reforming the international monetary system, and developing capital markets.
