BoP Outlook 2025/26: Can Nepal Maintain Surplus Amid Rising Imports?

Nepal’s external sector is showing encouraging signs as the Balance of Payments (BoP) remains in a healthy surplus of USD 561 million (Rs. 78 billion) in the first month of fiscal year 2025/26. However, growing import pressures, moderate export growth, and rising foreign loan repayments have raised concerns about the sustainability of this surplus in the coming months.

According to the Nepal Rastra Bank (NRB), the strong BoP position has been primarily supported by record-high remittance inflows of USD 1.27 billion, along with rising foreign exchange reserves exceeding USD 671 million in monthly build-up. These inflows have offset the persistent trade deficit, which still stands at USD −883 million, despite slight improvement in exports of goods and ICT services.

Economists suggest that the BoP surplus may narrow in the second quarter as import demand accelerates with the festive season, reconstruction activities, and higher oil purchases. The petroleum import bill alone exceeded USD 124 million in one month, while gold and coal imports also surged significantly. Rising capital goods and machinery imports linked to development projects could further widen the current account gap if remittances plateau.

Moreover, Nepal’s foreign direct investment (FDI) continues to record a net outflow (−USD 4.4 million), indicating investor caution amid domestic political uncertainty and slow industrial recovery. While the financial account surplusand reserves accumulation are currently offsetting external debt repayments, sustained pressure on the current account could erode this balance if remittance momentum slows or imports expand unchecked.

Economists emphasize that policy discipline will be crucial — including prudent import management, diversification of export markets, and encouragement of productive FDI. The NRB may also face challenges in managing liquidity if external inflows moderate.