Provinces show wide economic disparities

Bagmati alone to contribute 38% to national economy

Bagmati’s per capita GDP to remain at US$ 2,644 while Madhes to stay at US$934

 

Kathmandu, May 20

Among the seven provinces of Nepal, Bagmati alone is estimated to contribute more than one-third (36.7 per cent) to the national economy in the current Fiscal Year 2025/26.

According to the statistics published by the National Statistics Office (NSO) on Wednesday, there is a stark disparity among the provinces in terms of the size of economy, contribution to the national economy and per capita Gross Domestic Product (GDP).

Bagmati is projected to contribute Rs. 2.42 trillion to the national economy, which is estimated to reach Rs. 6.6 trillion by the end of this year.

Karnali will make a nominal contribution with just 4.2 per cent or Rs. 277 billion, while Sudurpaschim’s input will stand at Rs. 464 billion (7 per cent).

Likewise, Koshi will contribute Rs. 1.043 trillion (15.8 per cent), Lumbini Rs. 937 billion (14.2 per cent), Madhes Rs. 863 billion (13.1 per cent), and Gandaki Rs. 593 billion (9.0 per cent).

According to preliminary estimates for FY 2025/26, Bagmati is expected to record the growth rate of 5.40 per cent – the highest annual growth rate in provincial GDP based on consumer prices, followed by Gandaki Province at 5.01 per cent.

Similarly, Madhes is projected to have the lowest annual growth rate, at 1.31 per cent, according to the NSO.

“While the national annual GDP growth rate, measured at constant consumers’ prices, is preliminarily estimated at 3.85 per cent, only Bagmati and Gandaki provinces are expected to record growth rates higher than the national average,” read a statement from the Office.

Other provinces are projected to grow at rates below the national average – Sudurpaschim 3.28 per cent; Koshi 3.13 per cent; Lumbini 2.87 per cent; and Karnali 2.94 per cent. This year, Bagmati, Gandaki, Koshi and Sudurpaschim are likely to surpass last year’s growth achievement – 5.29 per cent, 4.92 per cent, 2.72 per cent and 3.21 per cent, respectively.

In the last FY 2024/25, Madhes’ growth rate was 4.43, Lumbini's 4.27 and Karnali's 5.25 per cent. The performance of Madhes and Karnali is estimated to have significantly deteriorated.

 

Agriculture largest contributor

According to economic activities classified by industry, agriculture is expected to remain the largest contributor to provincial economies in all provinces except Bagmati this year. In Bagmati, wholesale and retail trade is projected to contribute the largest share.

“Trade — which holds the second-largest share at the national level — is also expected to rank second in both Koshi and Madhes,” read the report.

Similarly, real estate services are projected to make the second-largest contribution in Bagmati. In Gandaki and Karnali, public administration and defence are expected to rank second in terms of contribution, while in Lumbini and Sudurpashchim, education services are projected to hold the second-largest share.

On the other hand, administrative and support services are expected to contribute the least in Koshi, Gandaki, Lumbini and Sudurpaschim provinces, while mining and quarrying activities are projected to have the lowest contribution in Madhes, Bagmati and Karnali provinces, estimated the NSO.

 

Electricity and gas sector to see highest growth

In terms of the sectoral growth rate, the electricity and gas sector is likely to witness the highest value addition growth rate in Koshi, with 23.76 per cent. This sector is also estimated to be top achiever in Bagmati, Gandaki, Lumbini and Madhes as well, with 22.88 per cent, 23.9 per cent, 9.18 per cent, and 10.91 per cent growth, respectively.

However, in Karnali and Sudurpaschim, financial and insurance services arre estimated to achieve the highest value-added growth, with 8.40 per cent and 7.98 per cent, respectively.

 

Disparities in per capita GDP

As in the growth performances, Madhes is estimated to witness the lowest per capita GDP.

The NSO informed that, according to the preliminary estimates, Madhes’ per capita GDP in US dollars will remain at 934.

On the contrary, Bagmati is expected to record the highest per capita GDP of US$ 2,644.

Likewise, the per capita GDP is estimated to reach US$ 1,651 for Gandaki; US$ 1,410 for Koshi; US$ 1,208 for Lumbini; US$ 1,170 for Sudurpaschim; US$ 1,108 for Karnali; and US$ 934 for Madhes.

At the national level, per capita GDP is estimated at USD 1,513 for the current fiscal year.

Based on this estimate, only Bagmati and Gandaki provinces are expected to record per capita GDP above the national average, while the remaining provinces are projected to remain below it.

Published in The Rising Nepal daily on 21 May 2026.