Kathmandu, 10 Jan: In Nepal, people in the 27 to 46 age group earn more than they spend on average, while those below 27 and above 46 spend more than they earn. This finding comes from the National Transfer Accounts (NTA) report released today by the National Statistics Office. According to the report, individuals under 27 and over 46 experience a life cycle deficit, where consumption exceeds income.
Releasing the report, Finance Minister Rameshwar Prasad Khanal said it helps understand how income and expenditure vary at different stages of an individual’s life. He noted that such data are crucial for the effective implementation of social security programs, formulation of industrial policies, and designing employment-generation initiatives.
“Without data, we cannot make sound policies. The National Transfer Accounts and the Small Area Estimation of Poverty reports show us what kinds of policies and plans are needed,” he said, adding that Nepal must generate its own reliable data through government-funded studies to support policy reforms and development planning.
Key Findings of the National Transfer Accounts
Chief Statistician Kamal Prasad Pokhrel said the NTA report has been prepared for the first time in Nepal and analyzes how income, consumption, savings, and resource transfers occur across different age groups. The Small Area Estimation of Poverty report has also been prepared for the first time since the implementation of federalism and is expected to support poverty-targeted plans and programs at federal, provincial, and local levels.
The NTA report studies life cycle accounts on both per capita and aggregate bases. When the population is divided into three age groups—children and youth (0–24 years), working-age population (25–64 years), and elderly (65 years and above)—the life cycle deficit is lowest in the 25–64 age group in fiscal year 2021/22. However, even this group does not show sufficient savings.
Per capita life cycle deficit is highest among those aged 65 and above, while overall deficit is highest in the 0–24 age group. Per capita consumption is highest among those aged 25–64 and lowest among those aged 0–24.
Employment, Consumption, and Economic Challenges
From birth to age 26, expenditure exceeds labor income, indicating a life cycle deficit. Between ages 27 and 46, income exceeds expenditure, showing a life cycle surplus. After age 47, expenditure again surpasses labor income, resulting in a life cycle deficit. Overall, an average life cycle surplus is observed only for about 20 years in a person’s life in Nepal.
For the remaining years, consumption must be met through asset redistribution or family and public transfers. Private consumption per capita is significantly higher than public consumption. In the health sector, per capita public consumption exceeds private consumption by 902 units.
In 2021 and 2022, per capita total labor income was approximately NPR 87,814. About 69 percent of total labor income came from wages and salaries, while 31 percent came from self-employment. The share of wage and salary income is highest in the 25–64 age group and lowest among those aged 65 and above.
The report highlights a large gap between consumption and labor income, with total labor income being lower than total consumption, resulting in a substantial life cycle deficit. The Nepal Labour Force Survey 2017/18 showed an unemployment rate of 11.4 percent, underscoring how unemployment has widened the gap between consumption and labor income.
Despite 65 percent of Nepal’s population being of working age (15–64 years), labor force participation stands at only 38.5 percent, and youth unemployment is 12.7 percent. Limited employment opportunities, skill mismatches, and significant outmigration for foreign employment have constrained domestic economic activity, emphasizing the urgent need for skill development and job creation policies.
