Nepal Postpones Graduation from LDC Status to 2030 Over Economic Challenges

The government has decided to postpone Nepal’s graduation from the status of a Least Developed Country (LDC) to a Developing Country for the time being, citing worsening global economic conditions and growing geopolitical uncertainties.

Speaking at a regular press conference briefing organized by the Ministry of Foreign Affairs on Friday, spokesperson Lok Bahadur Chhetri informed that Nepal will not move ahead with the graduation process under the current circumstances. Nepal had earlier targeted graduating to the category of a developing country by November 2024. However, the government has now extended the target by six years, setting a new deadline for November 2030.

According to spokesperson Chhetri, Foreign Minister Shishir Khanal has already formally informed the United Nations (UN) about Nepal’s decision to defer the graduation process. The ministry stated that both domestic and international economic indicators have turned unfavorable, making the transition difficult at this stage. Global conflicts have disrupted supply chains, affected foreign employment opportunities, and weakened remittance inflows, which remain a major pillar of Nepal’s economy.

The government has also taken into consideration the World Bank’s projection that Nepal’s economic growth rate is unlikely to exceed 2.3 percent, further complicating the country’s economic outlook. Officials believe that graduating from the LDC category under the current conditions could place additional pressure on the economy, as Nepal may lose several international trade facilities currently available to least developed countries. These include customs duty exemptions and quota-free market access in various international markets.

The ministry further noted that the long-term economic impacts of the COVID-19 pandemic, along with increasing geopolitical complexities across the globe, have slowed Nepal’s economic recovery and forced the government to delay the graduation plan. The government maintains that postponing the graduation process is necessary to safeguard the country’s economic stability and prepare more effectively for a sustainable transition in the future.