KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The Ministry of Finance has approved a Rs 600 million loan for the Dairy Development Corporation (DDC) to address overdue payments to farmers, contingent on Cabinet approval.
In the Nepali market, gold and silver prices have fallen, with gold down to Rs 152,000 per tola and silver to Rs 1,775 per tola, reflecting potential shifts in market conditions.
To tackle revenue leakages and illegal trade, the Ministry has established inspection teams to cover key highway segments, responding to past revenue collection shortfalls.
Additionally, Nepal has welcomed over 720,000 tourists in the first eight months of 2024, showing growth yet remaining below pre-pandemic levels.
Notably, motorcycle imports via Birgunj have doubled, contrasting with a 40% drop in car imports.
NEPSE bounces back with 127-Point gain on Monday
The Nepal Stock Exchange (NEPSE) Index on Monday rebounded strongly, rising by 127.32 points or 4.72%, closing at 2,823.25 points.
This recovery follows two days of declines, including a notable drop of 53.63 points in the previous session that had left the index at 2,695.93 points.
The trading session commenced with the index at 2,698 points and experienced significant volatility, reaching a high of 2,823.70 points and a low of 2,678.91 points before settling at 2,823.25 points.
Market activity was robust, with 335 stocks traded in 160,579 transactions. A total of 31,430,048 shares were exchanged, generating a turnover of Rs. 13.10 billion.
The market capitalization increased to Rs. 4.48 trillion, and the float market capitalization was recorded at Rs. 1.58 trillion.
Finance Ministry approves Rs 600 million loan proposal for DDC
The Ministry of Finance authorized the Ministry of Agriculture and Livestock Development to propose a Rs 600 million loan to the Dairy Development Corporation (DDC) to the Council of Ministers, contingent on specific conditions.
This funding is intended to address overdue payments owed to farmers for milk deliveries. For the current fiscal year, a Rs 10 million allocation is already earmarked for this loan investment.
Following Cabinet approval, the loan will be disbursed to the DDC. Persistent farmer demands for payment have driven extensive discussions among Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel, Agriculture Minister Ramnath Adhikari, and DDC officials.
Gold and silver prices drop in Nepali market amidst market fluctuations
On Monday, the Nepali market experienced a notable decrease in the prices of gold and silver.
Gold prices fell by Rs 300 per tola, bringing the current rate to Rs 152,000 per tola, down from Rs 152,300 per tola on Sunday, as reported by the Nepal Gold and Silver Traders Federation.
Similarly, silver prices decreased by Rs 20 per tola, now trading at Rs 1,775 per tola.
This drop in precious metal prices could be indicative of shifting market dynamics, potentially influenced by changes in global commodity markets, currency fluctuations, or local supply and demand conditions.
Finance Ministry forms inspection teams to combat revenue leakages and illegal trade
The Ministry of Finance formed two rapid inspection teams to address revenue leakages.
One team, led by the Inland Revenue Department’s deputy director general, will focus on the eastern East-West Highway segment from Chitwan to Mechi, while the other, led by the Department of Customs’ Deputy Director General, will cover the western section from Chitwan to Mahakali.
This move comes in response to recent criticisms over slow revenue collection, which fell to 68.21% of target in FY 2022/23 and 74.29% in the following year.
The government relies significantly on customs duties, which accounted for about 40% of total revenue last fiscal year.
Criticisms have intensified due to challenges in controlling illegal trade through the open border with India.
The MoF aims to enhance revenue through these new inspection teams, in line with its 100-day work plan.
Over 720,000 tourists visit Nepal in first eight months of 2024
In the first eight months of 2024, Nepal welcomed over 720,000 tourists, according to the Nepal Tourism Board (NTB).
The number of visitors in August 2024 reached 72,719, a notable increase from 67,153 in August 2023 and 41,304 in August 2022. Despite this growth, tourist arrivals are still below pre-pandemic levels, with August 2019 seeing 94,749 visitors.
The highest number of tourists this August came from India (25,832), followed by China (6,614), the United States (5,614), Sri Lanka (4,851), and Bangladesh (3,077).
Monthly arrivals showed steady numbers, with January at 79,100, February at 79,426, March at 128,167, April at 111,376, and May at 90,211, while June, July, and August saw 76,736, 64,599, and 72,719 tourists, respectively.
Import of two-wheelers via Birgunj border doubles
The import of motorcycles through Birgunj, a key transit point in the country, has seen a remarkable increase, doubling in the first month of the current fiscal year compared to the same period last fiscal year.
This represents a 100% rise. In contrast, the import of jeeps and cars has declined by 40%.
According to Birgunj Customs Office’s information officer Raghu Lal Karna, the number of motorcycles imported in the month of Shrawan (July-August) during the fiscal year 2080-81 BS (2023-24) was 3,571, valued at Rs 467.7 million.
This number surged to 7,150 motorcycles worth Rs 944.8 million in the first month of the current fiscal year, 2081-82 BS.
(Prepared by Srija Khanal)
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