May 22, Kathmandu - Nepal has decided to temporarily halt its plan to upgrade from the Least Developed Country (LDC) category to a Developing Country status. The government cited escalating global conflicts and resulting economic difficulties as the primary reasons for this decision.

During a regular press conference today, Foreign Ministry spokesperson Lok Bahadur Kshetri stated that the process of reclassification has been put on hold for the time being. Nepal had previously aimed to achieve this upgrade by November 2024. However, due to current adverse circumstances, the target has been deferred by six years, pushing the new deadline to November 2030. Kshetri also clarified that Foreign Minister Shishir Khanal has formally informed the United Nations of this decision.

The ministry attributed the postponement mainly to unfavorable domestic and international economic indicators. The ongoing global conflicts have severely disrupted supply chains, reduced foreign employment, and impacted remittance flows. Additionally, the World Bank's forecast that Nepal's economic growth rate may not exceed 2.3% has further compounded the challenges.

Nepal's upgrade to developing country status is crucial for retaining trade benefits such as customs exemptions and free quotas in the international market. Losing these privileges could pose a serious threat to the country's economy. Furthermore, increasing geopolitical tensions and the long-term effects of COVID-19 have also hindered economic recovery, prompting the government to delay the upgradation process, according to Kshetri.