KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.

PM Dahal pushes for budget expansion

Prime Minister Pushpa Kamal Dahal Prachanda is pushing for a budget larger than the ceiling set by the National Planning Commission, aiming to exceed it by at least two billion rupees for the next fiscal year.

This approach, focused on distribution-oriented programs, has been criticized for its potential to strain resources and increase long-term liabilities.

Despite challenges in revenue generation, with the government relying heavily on loans to meet financial obligations, the emphasis remains on creating a sizable budget to fulfill populist promises.

This move, spearheaded by PM Dahal, raises concerns about escalating public debt and the sustainability of future repayments. As officials from the Ministry of Finance and the National Planning Commission work on drafting a budget statement of approximately 22 trillion rupees to align with the Prime Minister’s objectives, questions linger about the fiscal prudence and long-term consequences of such ambitious spending plans.

NEPSE surges by 15.54 points, continuing four-Day upward trend

The Nepal Stock Exchange (NEPSE) has experienced a sustained surge over the past four days, with Wednesday marking another day of continued excitement in the market.

On Wednesday, NEPSE rose by 15.54 points, reaching a total of 2131.49 points, indicating a 0.73 percent increase from the previous trading session. This positive momentum is reflected in the substantial volume of trading activity, with transactions involving 1 crore 44 lakh 19 thousand 521 shares valued at 5 billion 68 crore 76 lakh 80 thousand rupees, occurring 78 thousand 51 times on NEPSE today.

However, amidst this upward trend, market dynamics reveal a mixed picture in terms of individual company performance.

While shares of 318 companies were traded, the share prices of 81 companies witnessed an increase, while 161 companies saw a decrease. The share prices of 5 companies remained stable.

This divergence underscores the varying trajectories within the market, suggesting that while overall sentiment remains positive, there are nuanced movements at the individual company level that investors must navigate.

Bagmati Province dominates economy

Recent data from the National Statistics Office reveals that Bagmati Province holds the largest share in Nepal’s economy for the current fiscal year (FY) 2080.81.

Contributing 36.4 percent to the country’s total domestic product at consumer prices, Bagmati emerges as the leading economic powerhouse among provinces.

In contrast, Karnali province trails behind with a modest 4.3 percent contribution to the national GDP.

Despite this, the NSO notes that Gandaki province boasts the highest growth rate in GDP, with preliminary estimates suggesting a significant 4.55 percent increase in consumer price-based provincial GDP for the current fiscal year.

However, Karnali province presents a contrasting scenario, with the NSO estimating the lowest economic growth rate at 3.39 percent. This discrepancy underscores regional variations in economic performance, with provinces like Bagmati and Gandaki showcasing relatively robust growth compared to Karnali.

Despite these differences, the overall economic landscape indicates a diverse pattern of growth across Nepal’s provinces, reflecting both challenges and opportunities for economic development and policy intervention.

Gold prices dip in Nepali market

Wednesday witnessed a decline in gold prices within the Nepali market, as reported by the Federation of Nepal Gold and Silver Traders.

The price of gold decreased by 100 rupees today, with Chapawal gold priced at 140,500 rupees and Tazabi gold at 139,800 rupees per tola.

This decrease follows Tuesday’s rates of 140,600 rupees per tola for gold and 139,900 rupees per tola for acid gold. Conversely, silver prices experienced an uptick today, rising by 15 rupees to reach 1,900 rupees per tola, according to the federation.

The fluctuation in precious metal prices underscores the dynamic nature of the commodities market, influenced by factors such as global economic conditions, investor sentiment, and local demand. While the dip in gold prices may reflect shifts in market dynamics or investor preferences, the rise in silver prices suggests evolving trends in commodity trading within Nepal.

Vegetable prices surge in Nepal

Vegetable inflation surged by 16.99% in mid-April compared to the previous year, attributed to several factors including changes in India’s export policy, new taxes by Nepal’s government, poor rainfall affecting production, and rising agricultural input costs. India’s restrictions on onion exports and Nepal’s imposition of taxes on essential vegetables exacerbated the situation.

Additionally, climate-related challenges and labor shortages further impacted production. Wholesale prices of various vegetables soared significantly within a month, reflecting the strain on supply chains.

Despite being the peak vegetable season, prices remained high due to inadequate rainfall disrupting both production and timely arrivals at markets.

Govt’s leniency on industrial dues sparks NEA discontent

The government’s recent leniency towards industrialists regarding dues on dedicated feeder and trunk lines has sparked dissatisfaction within the Nepal Electricity Authority (NEA).

A cabinet decision to implement an inquiry committee’s report, formed to investigate tariff disputes, has stirred controversy. The committee, led by former Supreme Court Justice Girish Chandra Lal, recommended exempting industrialists from premium charges for specific periods.

However, the NEA and manufacturers remain at odds over billing practices, with NEA officials expressing skepticism over the committee’s recommendations. The lack of a clear billing mechanism complicates the resolution of this longstanding issue.

(Compiled and prepared by Srija Khanal)

Economic Digest is a daily morning economic digest, basically relatable summations of the most important business news, and happenings from Nepal into easy-to-understand summaries.