Graduation manageable

"The core message is that graduation is manageable, but only with early, coordinated and inclusive action," Ozcan said.

Jyotsna Shrestha, chairperson of the Employers' Council and vice-chair of the Federation of Nepalese Chambers of Commerce and Industry, or FNCCI, said Nepal's exit from the LDC category is a matter of national pride reflecting decades of development progress.

"However, from the perspective of the private sector, this transition also raises serious questions about preparedness and competitiveness," she said.

"For many industries, particularly export-oriented and labor-intensive sectors, the preferential market access available under LDC status has played an important role in sustaining exports and employment ... This is a concern the private sector cannot ignore."

Shrestha said many businesses are already grappling with structural challenges, including high logistics costs, limited infrastructure, policy uncertainty and regulatory complexity.

"At the same time, we recognize that LDC exit also creates opportunities," Shrestha said. "It can encourage Nepal to move toward a more diversified and competitive economy and create new jobs."

Prakash Kumar Shrestha, vice-chairman of the National Planning Commission, said Nepal's graduation from LDC status marks the beginning of a new development phase.

Without mitigation measures, the country could face a nominal GDP loss of $851 million in 2026 and cumulative real GDP losses approaching $1 billion over the next five years.

"These results are evidence-based warnings that should guide proactive policy action," he said.

"Our productivity levels are low, and our regulatory systems and institutional capacities also need strengthening. Therefore, our approach should not be limited to preserving preferences."

Instead, he said, targeted investments in trade facilitation, tourism and ICT could help offset GDP losses and significantly reduce the employment impact of LDC exit.

The Kathmandu Post, Nepal