Provincial Economy of Nepal: GPP, Per-Capita Income & Growth by Province

Gross Provincial Product (GPP) is the provincial equivalent of Gross Domestic Product (GDP): the total money value of all goods and services produced inside a province in one fiscal year. Nepal's fiscal year runs from mid-July to mid-July, so the latest estimates discussed here cover fiscal year 2024/25, which corresponds to Bikram Sambat (BS) 2081/82. The figures are compiled by the National Statistics Office (NSO), formerly the Central Bureau of Statistics, and published as the Provincial National Accounts.

The NSO builds each province's account from Gross Value Added (GVA) across agriculture, industry and services, then aggregates the seven provinces to reconcile with national GDP. Because production, not residence, is what counts, output generated by factories, hydropower plants, hospitals, banks and government offices is attributed to the province where the activity physically takes place. This is why a province that hosts the capital or major industrial corridors can dominate the totals even if its population is not the largest.

Two derived indicators make provinces comparable. Share of national GDP shows how much of Nepal's economy sits in each province, and GPP per capita (provincial output divided by provincial population) approximates average income and living standards. Provincial GDP growth, measured at constant prices, strips out inflation to show the real change in output from one year to the next. Together these let researchers, students and policymakers rank provinces from richest to poorest and track whether regional gaps are widening or narrowing.

By total output, Bagmati Province is comfortably Nepal's richest province, contributing 36.52% of national GDP in fiscal year 2024/25. Koshi is a distant second at 15.90%, followed by Lumbini at 14.23% and Madhesh at 13.16%. Gandaki (8.98%), Sudurpashchim (7.03%) and Karnali (4.19%) round out the list, with Karnali producing the smallest share of the national economy.

Nepal's national GDP for fiscal year 2024/25 was estimated at roughly Rs 6.1 trillion (about Rs 6,107 billion) at purchaser prices. Applying each province's share to that national total gives an approximate nominal Gross Provincial Product for each province. These derived rupee figures are indicative rather than official line items, but they translate the percentage shares into a sense of scale: Bagmati alone accounts for well over one-third of everything Nepal produces.

The concentration is striking. The top three provinces (Bagmati, Koshi and Lumbini) together generate about 66.7% of national output, while the three least-populous or geographically hardest provinces (Gandaki, Sudurpashchim and Karnali) together produce only about 20%. This imbalance reflects Nepal's economic geography: manufacturing, trade, tourism, finance and the largest urban populations cluster in the central hills and the eastern and western Tarai, while the high mountains and remote Karnali have thin economic bases.

Per-capita GDP tells a different story from total output, because it divides production by population. In fiscal year 2024/25 Bagmati again leads with a per-capita GDP of about US$2,602, far above every other province. Gandaki is second at roughly US$1,619, benefiting from a relatively small population, strong tourism around Pokhara and large remittance inflows. These are the only two provinces above the national per-capita average of about US$1,496.

At the other end, Madhesh Province records the lowest per-capita GDP at about US$932, despite being Nepal's second most populous province and a major agricultural producer. Its large population divides output thinly, and its economy leans on subsistence and low-productivity farming. Karnali (about US$1,089) and Sudurpashchim (about US$1,153) sit near the bottom too, reflecting remoteness, difficult terrain and limited industrial and service activity. Koshi (US$1,401) and Lumbini (US$1,201) fall in the middle band.

The gap between the highest and lowest per-capita province is roughly 2.8 to 1, a wide disparity that underpins debates over fiscal transfers, provincial development budgets and equalisation grants. Gandaki's high ranking illustrates a key point: strong per-capita income does not require a large total economy. A province with a modest population, healthy remittances and tourism can outrank far larger economies on the per-person measure that best proxies living standards.

Nepal's national economy grew about 4.61% in real terms in fiscal year 2024/25. Four provinces outpaced that national rate. Gandaki grew fastest at 5.51%, followed by Bagmati at 5.18%, Karnali at 4.74% and Lumbini at 4.70%. The remaining three grew more slowly than the country as a whole: Madhesh at 4.50%, Koshi at 3.34% and Sudurpashchim at 3.32%, the weakest performer of the year.

Because growth is measured at constant prices, these rates show real changes in the volume of goods and services, not price effects. That Gandaki and Bagmati led on growth while also topping per-capita income suggests their advantage over other provinces continued to widen in fiscal year 2024/25. Karnali and Lumbini growing above the national average, however, is a modest sign of catch-up at the lower end of the income ranking.

Provincial growth in Nepal is volatile and can swing sharply between years, so a single year's rate should be read with caution. Bagmati, for instance, was the top performer in fiscal year 2021/22 with growth near 6.7%, then slumped to roughly 1.4% in fiscal year 2022/23 during the wider post-pandemic and import-restriction slowdown, before recovering. Structural factors such as monsoon-dependent agriculture, tourism cycles, construction activity and remittance flows drive much of this year-to-year variation.

Bagmati Province is the clear centre of gravity in Nepal's economy. It hosts the Kathmandu Valley, home to the capital and to the country's densest concentration of banks, corporate headquarters, government offices, universities, hospitals, hotels and manufacturing. This service- and industry-heavy structure explains why a single province produces more than 36% of national GDP and delivers a per-capita income roughly 74% above the national average.

The composition of Bagmati's economy differs sharply from the agrarian Tarai provinces. Services, including trade, finance, transport, tourism, real estate and public administration, dominate value added, while high-value industry and construction are also concentrated in and around the valley and along the Bagmati and adjoining corridors. This gives the province a productivity edge, because service and industrial jobs typically generate far more output per worker than subsistence agriculture.

Bagmati's dominance is also a policy concern. Its outsized share means national growth figures are heavily influenced by what happens in and around Kathmandu, and it concentrates economic opportunity, migration and investment in one region. Balancing this concentration against development in Madhesh, Karnali and Sudurpashchim is a recurring theme in Nepal's federal fiscal policy and in the annual provincial budgets.

Gandaki Province is the standout on quality-of-income measures. Although it produces only about 9% of national GDP, its comparatively small population, the Pokhara tourism economy and heavy reliance on remittances from overseas workers push its per-capita GDP to roughly US$1,619, the second highest in Nepal. In fiscal year 2024/25 it also grew fastest of any province, reinforcing its position as the strongest non-Bagmati economy on a per-person basis.

Koshi and Lumbini are Nepal's large mid-tier economies. Koshi, in the east, combines Tarai agriculture, the Biratnagar-Biratchowk industrial belt and cross-border trade to reach the second-largest total output share (15.90%), though its per-capita income (about US$1,401) is only mid-ranked and its FY 2024/25 growth was subdued at 3.34%. Lumbini, spanning the western Tarai and hills, contributes 14.23% of GDP with a per-capita figure near US$1,201 and healthier growth of 4.70%.

At the margins sit Madhesh, Sudurpashchim and Karnali. Madhesh is populous and agriculturally important but has the lowest per-capita income because output is spread across so many people. Sudurpashchim and Karnali, in the far west, face remoteness, difficult mountain terrain, thin industrial bases and heavy dependence on remittances and government spending. Karnali produces the smallest total output of any province (4.19%), even though its per-capita figure (about US$1,089) edges above Madhesh's because of its far smaller population.

All headline figures on this page come from the NSO's Provincial National Accounts for fiscal year 2024/25 (BS 2081/82), released in May 2025. Provincial accounts are typically preliminary or revised estimates that can be updated as more data arrives, so the exact decimals may shift in later NSO releases. Shares and per-capita and growth figures are directly reported by the NSO; the nominal rupee Gross Provincial Product amounts shown are approximate, derived by applying each province's published GDP share to the national GDP of about Rs 6.1 trillion.

The US dollar per-capita figures depend on the exchange rate the NSO uses to convert rupee output, so they should be treated as indicative rather than exact. For genuine welfare comparisons, per-capita GDP in purchasing-power terms would differ, and GDP does not capture income distribution, the informal economy or remittances received (as opposed to produced) within a province. Remittances in particular support consumption in provinces such as Gandaki, Karnali and Sudurpashchim even though they are recorded differently in the accounts.

For the most current and detailed data, consult the NSO's official Provincial National Accounts datasets, which publish province-by-year tables for per-capita GDP and provincial GDP growth.