Inflation Rate Following significant volatility in the past five years, the inflation rate in Nepal had stabilized, reaching a 13-year low in 2017, aided by declining food prices and moderation in the cost of non-food items. In 2018, the inflation rate reported a marginal spike due to a sharp rise in vegetable prices; going forward, it is forecast to remain at 5%. In recent months, strong trade linkages with India have resulted in Nepal’s inflation trend mimicking that of India. Source: Nepal's Macro Environment and Key Industry Prospects, 2017–2022 Population High population growth in Nepal has long been regarded as one of the critical challenges inhibiting economic growth. The country’s population almost doubled between 1960 and 1990. However, the expansion of mass education, rising economic opportunities, urbanization, growth in female labor force participation, and delayed marriages are leading to declines in fertility rates and slowing population growth. Population Growth Rate, Nepal, 2013/14–2021/22F 2013/14 2014/15 2015/16 2016/17 2017/18 F 2018/19 F 2019/20 F 2020/21 F 2021/22 F Population (Million) 28.11 28.43 28.85 29.15 29.51 29.87 30.22 30.55 30.91 Annual population growth (%) 1.1% 1.1% 1.5% 1.0% 1.2% 1.2% 1.2% 1.1% 1.2% Source: Nepal's Macro Environment and Key Industry Prospects, 2017–2022 Poverty With almost 18.2% (Source: 15th Annual Development Program) of the population living below the national poverty line, 50% of the population earning below ~US $3 per day, and a per capita income below international and regional standards, Nepal is considered among the poorest nations in South Asia, trailing only Bangladesh. This is primarily due to socioeconomic conditions where almost 80% of Nepal’s population lives in rural areas, have large families, very small landholdings, and lack access to primary healthcare, education, safe drinking water, sanitation, and other necessities. The earthquake in 2015 that caused widespread devastation coupled with high dependence on agriculture and geographical issues such as rugged terrain, lack of rainfall, and poor soil quality has further 10