Nepal faces reconstruction bill equal to 10% of GDP after devastating floods

Nepal could face a reconstruction bill of $4 billion to $5 billion after the floods, an amount equal to roughly one-tenth of the country’s economy. The estimate covers the cost of restoring collapsed infrastructure and would place a heavy burden on the small, landlocked country of about 30 million people.

Nepal’s Finance Minister Swarnim Wagle gave the initial estimate of about $4 billion to $5 billion to Reuters on Aug. 29. The figure matches roughly 10% of Nepal’s 2025 gross domestic product, which stands at $41.2 billion, or 55.6 trillion won.

The damage reaches beyond roads and buildings. The floods struck hydropower, tourism and agriculture, three major pillars of Nepal’s economic growth. Nepal’s disaster management authority said about 1.6 million people, or 5% of the population, were affected and that roughly 20,000 homes would need to be rebuilt.

The scale of the bill adds pressure to a country still classified by the United Nations as a least-developed country. Nepal has also not fully recovered from the 2015 earthquake, which killed more than 9,000 people. The latest disaster has left the government facing reconstruction needs equivalent to a substantial share of national output.