Nepal, April 28 -- The government led by the Rastriya Swatantra Party, which commands nearly a two-thirds majority, has acknowledged that Nepal's economy is trapped in an unproductive cycle, raising concerns about its long-term sustainability.

The assessment comes in the State of the Economy Report unveiled on Monday by Finance Minister Swarnim Wagle, who outlined a range of structural and policy-driven challenges weighing on the economy.

Wagle pointed to Nepal's inclusion on the grey list for failing to meet international standards on anti-money laundering and countering the financing of terrorism, warning that the move has dented global financial credibility and complicated efforts to attract foreign investment. He also noted that wh...