KATHMANDU, April 9 (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 Middle East 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 4.2 U.S. dollars per day threshold is expected to rise slightly to 6.6 percent in fiscal year 2025-26 under the conflict scenario, compared to 6.5 percent 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," the report said. "At the same time, a sharp drop in remittances -- particularly from the Middle East -- poses a serious risk to rural communities that depend heavily on foreign employment earnings."
According to Nepal's Ministry of Foreign Affairs, over 1.7 million Nepalis are legally residing in the Middle East. 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 Middle East 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 percent 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. ■
