In 2025, the world faces a complex web of uncertainties. Global economic growth stabilizes, but at a moderate pace that is insufficient to sustain development in many emerging economies Geopolitical conflicts such as the war between Russia and Ukraine and tensions in the Middle East continue to destabilize energy markets, disrupt supply chains and fuel inflation. Trade tensions, particularly between major economies such as the US and China, add another layer of unpredictability, affecting global trade flows and investment. Inflation, although slowing in some regions, remains a problem, potentially leading to monetary tightening.

For Nepal, a landlocked developing country, these global shocks are compounded by specific regional challenges. Its geography makes it dependent on neighboring countries, primarily India and increasingly China, for trade and transit, leaving its supply chains vulnerable to disruptions at border crossings and shifts in neighboring policies. Infrastructure gaps, including in transport, energy and digital sectors, further exacerbate these vulnerabilities.