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Subject

Nepal's post-election outlook.

Significance

Elections for Nepal’s parliamentary lower house produced a decisive result in favour of a leftist alliance, but the formation of a new government has been delayed. The winning communist parties are struggling to agree on a merger and face several policy tests.

Impacts

India-China rivalry is set to rise in Sri Lanka, with Delhi and Beijing looking to increase investment.

Nepal’s GDP growth in fiscal year 2017/18 (July-July) may be less than 5%.

Kathmandu may seek to step up its trading relations with ASEAN states.

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