Nepal: Sixth Review Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Nepal

This paper presents Nepal’s Sixth Review under the Extended Credit Facility Arrangement. Nepal has, so far, been relatively insulated from recent global trade and aid-related disruptions given its small export sector. Economic activity has continued to gradually recover, underpinned by a rebound in construction and manufacturing, continued expansion of hydropower, and a good harvest that helped offset the impact of the September 2024 floods. Program performance was broadly adequate with all quantitative performance criteria (QPC) met. All continuous PCs were met. Only the indicative target on child welfare grants was missed, although all children that applied received payments. Adequate progress was made on implementing structural reforms, with six structural benchmarks (SBs) completed (four met on time). Tangible progress was made on the remaining SBs with clear commitment for completion and one SB is proposed to be reset allowing the authorities more time to complete the reforms. Advancing efforts to modernize the anticorruption framework and institutions and strengthen intergovernmental coordination will further bolster transparency and accountability.