KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The NEPSE index fell by 51.11 points to 2,702.65, signaling market volatility amid investor concerns, despite a turnover of Rs 10.46 billion.
The filing of Rs 11.82 billion in insurance claims due to recent monsoon disasters highlights community vulnerabilities to climate risks, with Rs 610.79 million already disbursed to support affected individuals.
Remittances increased by 11.5% to Rs 407.31 billion in the first three months of the fiscal year, although this growth is slower than last year’s 25.8%, indicating potential stabilization among Nepalese workers abroad.
Additionally, declines in both exports (6.1%) and imports (4.2%) may point to broader economic challenges, contributing to a reduced trade deficit.
Gold prices rose by Rs 1,100 per tola, reflecting demand for safe-haven assets amid economic uncertainty.
The Nepal Rastra Bank reported a 4.82% inflation rate and USD 16.60 billion in foreign exchange reserves, suggesting a stable yet closely monitored macroeconomic environment.
Moreover, Germany’s commitment of €10 million to improve Nepal’s power distribution infrastructure is a positive sign of international support for development.
Additionally, the Ministry of Land Management’s efforts to amend outdated laws indicate a recognition of the need for legal reforms to address land disputes and enhance sustainable development practices.
Overall, while there are indicators of growth, navigating external and domestic challenges will be crucial for achieving economic stability.
NEPSE drops 51.11 points to end at 2,702.65
The Nepal Stock Exchange (NEPSE) fell by 51.11 points (1.85%) on Tuesday, closing at 2,702.65.
This decline follows a modest increase of 4.98 points in the previous session. The market opened at 2,758.42 points and experienced fluctuations, reaching an intraday low of 2,696.42 and a high of 2,759.54.
By the end of the day, the total turnover was Rs 10.46 billion, with 22,588,247 shares traded across 310 companies in 105,827 transactions.
Insurance claims worth Rs 11.82 Billion submitted
Insurance claims totaling Rs 11.82 billion have been filed for reimbursement following the monsoon-induced disasters that struck on September 27 and 28.
As of mid-November, the Nepal Insurance Authority reported that Rs 610.79 million had been disbursed to victims based on loss assessments.
A total of 3,418 applications have been submitted for compensation, with Siddhartha Premier Insurance Company receiving the highest number of claims at 501.
Other insurers also reported significant claim submissions: Oriental Insurance Company received 176 applications, Sagarmatha Lumbini Insurance Company received 377, Himalayan Everest Insurance Company received 243, and NECO Insurance received 219 claims.
Additionally, United Ajod received 323 applications, Sanima GIC received 217, and IGI Prudential received 296 claims.
Country receives more than Rs 407 billion in remittances in three months
In the first three months of the current fiscal year, Nepal received Rs 407.31 billion in remittances, marking an 11.5% increase compared to the same period last year, though this growth rate is lower than the 25.8% rise seen previously.
According to the Nepal Rastra Bank (NRB), remittance inflows totaled approximately USD 3.04 billion, up from USD 2.76 billion last year.
Additionally, 110,654 Nepali workers received first-time approval for foreign employment, while 59,939 sought renewed entry.
This indicates a slight decrease in first-time approvals compared to last year when 113,397 workers were approved.
While remittance inflows have shown positive growth, the slower increase and decline in new foreign employment approvals suggest a more cautious labor migration environment.
Exports and imports decrease
During the three months, Nepal’s exports and imports decreased by 6.1% and 4.2%, respectively.
Exports fell to Rs 38.38 billion, compared to a decrease of 2.3% in the same period last year. Exports to India, China, and other countries dropped by 5.3%, 24.8%, and 6.6%, respectively.
While exports of soybean oil, tea, particle board, shoes and sandals, and oil cakes increased, exports of zinc sheets, palm oil, cardamom, juice, and ready-made garments saw declines.
Imports decreased by 4.2% to Rs 390.75 billion, a contrast to a 1.7% increase a year ago. By destination, imports from India, China, and other countries fell by 3.9%, 1.5%, and 7.9%, respectively.
The total trade deficit decreased by 4% to Rs 352.37 billion during the first three months of the current fiscal year, which had increased by 2.1% in the same period last year. The export-import ratio dropped to 9.8% from 10% in the corresponding period last year.
Gold price up by Rs 1,100 per tola
Gold prices in the Nepali market rose on Tuesday, with the Federation of Nepal Gold and Silver Dealers reporting an increase of Rs 1,100 per tola, bringing the total price to Rs 162,100 per tola.
On Monday, gold had already seen a rise of Rs 1,000 per tola, trading at Rs 161,000.
Additionally, the price of silver also increased by Rs 35 per tola today, now standing at Rs 1,955 per tola, following a price of Rs 1,920 per tola on Monday.
Macroeconomic indicators for FY 2024/25: Remittance inflows rise by 11.5%, Inflation at 4.82%
Nepal Rastra Bank, the central bank of Nepal, has released the latest macroeconomic data for the first three months of FY 2024/25.
According to the bank, year-on-year inflation is at 4.82%, with gross foreign exchange reserves recorded at USD 16.60 billion.
Total imports fell by 4.2%, while exports decreased by 6.1%. The NEPSE index reached 2,742.89 in mid-October 2024, a notable increase from 1,864.62 in mid-October 2023.
Year-on-year consumer price inflation was 4.82% in mid-October 2024, down from 7.50% a year prior.
Year-on-year wholesale price inflation was recorded at 5.51% in mid-October 2024, compared to 2.78% the previous year.
Specifically, wholesale prices for consumption goods, intermediate goods, and capital goods rose by 8.22%, 4.36%, and 2.63%, respectively, while the wholesale price of construction materials decreased by 4.58%.
Germany to provide Rs 1.46 billion grant to Nepal for power distribution project
Germany has agreed to provide a grant of 10 million Euros (approximately NPR 1.46 billion) to Nepal for the Power Distribution Strengthening Program (PoDiSP).
The grant agreement was signed today by Dr. Thomas Prinz, the German Ambassador to Nepal, and Dhani Ram Sharma, Joint Secretary at Nepal’s Ministry of Finance.
The PoDiSP aims to enhance Nepal’s electricity distribution infrastructure and implement climate-friendly technologies to improve the reliability and efficiency of the power supply.
Key development areas include Bharatpur, Butwal Bhairahawa, and Pokhara, and the program will assist the Nepal Electricity Authority in conducting a detailed feasibility study and upgrading existing power distribution systems.
Tea exports soar by 69 percent in first quarter
The Mechi Customs Office has reported a significant increase in tea exports, rising by 69.22 percent in the first quarter of the current fiscal year.
During the first four months (Shrawan-Kartik), a total of 8,062.16 metric tons of tea were exported.
Ganapati Kandel, Information Officer at the Office, noted that the increase in exports also led to a 67.87 percent rise in the value of the tea, which amounted to Rs 2.20 billion, up from Rs 1.31 billion during the same period last year.
Conversely, exports of black cardamom, ginger, amriso, chhurpi, cauliflower, cabbage, and broccoli saw declines.
Specifically, black cardamom exports decreased by 11.87 percent, amriso by 11.66 percent, chhurpi by 41.45 percent, and exports of cauliflower, cabbage, and broccoli each dropped by 27.98 percent.
Ministry of Land Management in process of amending outdated laws
Minister for Land Management, Cooperatives, and Poverty Alleviation Balaram Adhikari has stated that the Ministry is currently amending and reforming outdated Acts, Regulations, and laws that conflict with the Constitution.
He emphasized that these outdated regulations and traditional thinking have hindered land survey, revenue, and management efforts. Minister Adhikari highlighted ongoing disputes and issues concerning land use, tenure, and ownership across the country, particularly in areas like Dharan, Bhairahawa, Birgunj, and Janakpur.
(Prepared by Srija Khanal)
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