Agriculture sustains 76% of the population and accounts for about 39% of the GDP; services comprise 42%, and industry 21%. Hilly and mountainous terrain in the northern two-thirds of the country has made the building of roads and other infrastructure difficult and expensive. There are just over 4,000 km of paved roads, and one 59 km railway line in the south. Aviation is in a better state, with 46 airports, nine of them with paved runways. There is less than one telephone per 46 people; landline services are poor, although mobile telephony is in a reasonable state in some parts of the country. There are around 100,000 Internet connections, but after the imposition of the "state of emergency", intermittent losses of service have been reported.

Its landlocked location and technological backwardness and the long-running civil war have also prevented Nepal from fully developing its economy. The country receives foreign aid from China, the United States, Japan and the European Union. The government's budget is about US$665 million, with expenditures of $1.1bn. The inflation rate has dropped to 2.9% after a period of higher inflation during the 1990s. The Nepalese Rupee has been tied to the Indian Rupee at an exchange rate of 1.6 for many years. Since the loosening of exchange rate controls in the early 1990s, the black market for foreign exchange has all but disappeared. A long-standing economic agreement underpins a close relationship with India.

The distribution of wealth among people is consistent with that in many developed and developing countries: the highest 10% of households control 39.1% of the national wealth and the lowest 10% control only 2.6%.

Nepal's workforce of about 10 million suffers from a severe shortage of skilled labour. Agriculture employs 81% of the workforce, services 16% and manufacturing/craft-based industry 3%. Agricultural produce——mostly grown in the Terrai region bordering India——includes rice, corn, wheat, sugarcane, root crops, milk, and water buffalo meat. Industry mainly involves the processing of agricultural produce, including jute, sugarcane, tobacco, and grain. The spectacular landscape and deep, exotic culture of Nepal represents considerable potential for tourism, but growth in this export industry has been stifled by recent political events. The rate of unemployment and underemployment approaches half of the working-age population. Thus many Nepalese move to India in search of work, the Gulf countries and Malaysia being new sources of work. Nepal receives US$50 million a year through the Gurkha soldiers who serve in the Indian and British armies and are highly esteemed for their skill and bravery. The total remittance value is worth around 1 billion USD, including money sent from Arab and Malaysia, who combinedly employ around 200,000 Nepalese.

Nepal's GDP for the year 2005 is estimated at just over US$37 billion (adjusted to Purchasing Power Parity), making it the 83rd-largest economy in the world. Per-capita income is around US$1,402, ranked 163rd. Nepal's exports of mainly carpets, clothing, leather goods, jute goods and grain total $568 million. Import commodities of mainly gold, machinery and equipment, petroleum products and fertiliser total US$1.419 bn. India (48.8%), the US (22.3%), and Germany (8.5%) are its main export partners. Nepal's import partners include India (43%), the United Arab Emirates (10%), China (10%), Saudi Arabia (4.4%), and Singapore (4%).