West Asia conflict To Push Over 17,000 Nepalis Into Poverty: World Bank

KATHMANDU, April 9 (Bernama-Xinhua) -- An estimated 17,267 additional individuals are expected to be pushed below the poverty line in Nepal in fiscal year 2025-26 as a direct consequence of the West Asia conflict, a World Bank report released on Wednesday said.

The global lender said in its flagship report, the Nepal Development Update, that poverty in Nepal at the US$4.2 per day threshold is expected to rise slightly to 6.6 per cent in fiscal year 2025-26 under the conflict scenario, compared to 6.5 per cent in the pre-conflict baseline.

"While the increase appears marginal at the aggregate level, it translates into a significant rise in the number of people falling into poverty," the bank said.

A combination of economic pressures and declining remittance inflows is projected to impact poverty levels.

"Inflation is expected to erode real incomes, disproportionately affecting low-income households.

"At the same time, a sharp drop in remittances -- particularly from the West Asia -- poses a serious risk to rural communities that depend heavily on foreign employment earnings," the report said.

According to Nepal's Ministry of Foreign Affairs, over 1.7 million Nepalis are legally residing in West Asia. Remittances sent by them, most of whom are migrant workers, remain a lifeline for the country's economy.

Meanwhile, the World Bank also said Nepal's economic growth is projected to moderate in the current fiscal year, reflecting the combined impact of the West Asia conflict and recent domestic unrest in September last year.

According to baseline projections, the country's gross domestic product growth is expected to slow to 2.3 per cent in fiscal year 2025-26. The slowdown underscores growing external and internal pressures affecting economic activity, including disruptions linked to global instability and local political challenges, the report said. 

--BERNAMA-XINHUA