Nepal is among the poorest and least developed countries in the world, with about one-quarter of its population living below the poverty line.
Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and accounting for a little over one-third of GDP.
Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain.
Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of feasible capacity, but political instability hampers foreign investment.
Additional challenges to Nepal's growth include its landlocked geographic location, civil strife and labor unrest, and its susceptibility to natural disaster.