Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU – A new government study has revealed a concerning trend in the financial lives of Nepalis. According to the “National Transfer Account” report released by the National Statistics Office, people in Nepal only manage to earn more than they spend for a short 20-year window—between the ages of 27 and 46.
For the rest of their lives—both before age 27 and after age 46—most Nepalis face what experts call a “Life Cycle Deficit.” This means their daily consumption and living costs are higher than the income they generate from work.
The 20-Year Window of SavingsThe report shows that from birth until age 26, young people rely heavily on others because their earning capacity is low while education and living costs remain. Similarly, after the age of 47, income starts to drop significantly compared to expenses, particularly as healthcare needs increase in old age.
This leaves only a small period of about 20 years where the average person actually makes a profit. During this time, they must not only support themselves but also save enough to cover the “deficits” of their children and their own future retirement.
Low Wages and Unemployment ChallengesThe data paints a tough picture of the current job market. In the 2021/22 fiscal year, the average annual income from work was just around Rs. 87,814 per person. Most of this income (69%) comes from daily wages and salaries, while the rest comes from self-employment.
Finance Minister Rameshwar Prasad Khanal, while releasing the report, noted that this data is a wake-up call for policymakers. He explained that without a clear understanding of how people earn and spend at different stages of life, the government cannot create effective social security or employment programs.
The Need for Better JobsThe study also highlighted that while 65% of Nepal’s population is of working age (15-64 years), many are not finding the right opportunities. The youth unemployment rate stands at 12.7%, and only about 38.5% of the total workforce is actively participating in the labor market.
Because local jobs are limited and wages remain low, a huge portion of the working-age population has moved abroad for employment. This has left the domestic economy struggling to grow as expected. Experts suggest that the government must now focus on skill development and creating better-paying jobs at home to ensure that the “20-year savings window” can actually lead to long-term financial security for the nation.
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