KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape is witnessing significant developments across various sectors. The record surge in gold prices reflects growing market volatility, while the Udayapur Cement Industry’s crisis underscores the financial mismanagement of state-owned enterprises.
Meanwhile, Nepal’s struggle with FATF grey listing highlights ongoing concerns over money laundering, despite government efforts to enhance financial transparency.
In taxation, the finance minister’s push for settlement provisions aims to improve revenue collection but raises concerns about accountability. Infrastructure projects like the Nagdhunga Tunnel face delays due to local protests, increasing costs and uncertainty.
The Asia-Pacific telecom conference signals Nepal’s ambition to expand digital connectivity, whereas ongoing banking sector instability, as warned by PM Oli, poses risks to financial stability.
Additionally, increased tourist inflows to Mustang and the resumption of domestic and international flights indicate a gradual recovery in the travel sector.
However, persistent issues such as vandalism, disruptions in hydropower projects, and adverse weather affecting aviation highlight the challenges Nepal faces in ensuring stable economic growth.
Gold prices hit record high in Nepal
Gold prices in Nepal reached an all-time high, with hallmark gold trading at NPR 177,900 per tola (11.66 grams) on Monday. This marks an increase of NPR 1,100 from the previous day. Silver prices have also risen by NPR 10 per tola, now standing at NPR 2,035 per tola.
Udaypur Cement Industry faces crisis as mining license expires
The state-run Udayapur Cement Industry is in a dire situation after failing to renew its limestone mining license due to outstanding dues. The company owes NPR 5 billion, including NPR 3.37 billion to the government, and has been operating at below 50% capacity for four years.
With no cement in stock, prices have surged to NPR 700 per bag. A government report suggests privatization as the only viable solution for both Udayapur and Hetauda Cement industries.
Spike in suspicious transactions as Nepal grapples with FATF grey listing
Nepal has witnessed an almost sevenfold rise in suspicious transactions over the past five years, with 7,338 cases reported in the fiscal year 2023/24, reflecting a 24% increase from the previous year, as per data from Nepal Rastra Bank’s Financial Intelligence Unit (FIU).
This surge occurs while Nepal remains on the Financial Action Task Force (FATF) grey list due to deficiencies in addressing money laundering and terrorist financing.
The majority of these flagged transactions were linked to banking, foreign exchange, insurance, and cooperative sectors, involving tax evasion, money laundering, and fraud.
Finance Minister defends tax evasion settlement policy
Deputy Prime Minister and Finance Minister Bishnu Paudel defended the policy allowing settlement of tax evasion cases, emphasizing its role in boosting revenue collection.
Addressing the National Assembly on Monday, he explained that while settlements were previously permitted for tax evasion cases up to NPR 500 million, the revised bill reduces the limit to NPR 30 million. He asserted that the aim is not to legitimize tax evasion but to expedite resolution and ensure revenue recovery.
Asia-Pacific Telecom Conference kicks off in Kathmandu
Delegates from 38 Asia-Pacific Telecommunity (APT) member nations have convened in Kathmandu for the 34th Wireless Group (AWG-34) meeting.
Organized by Nepal’s Ministry of Communication and Nepal Telecommunication Authority, the event centers on advancements in wireless technology for the digital era.
Over 400 participants, including 200 in Kathmandu, engaged in discussions on spectrum management, the evolution of 5G and 6G, and strategies to bridge the digital divide. Nepal is striving to expand nationwide broadband access and introduce 5G in major cities by next year.
PM Oli alleges attempts to destabilize the banking sector
Prime Minister KP Sharma Oli has claimed that certain factions are attempting to undermine Nepal’s banking sector by influencing public sentiment.
Speaking in Parliament on Monday, he accused a group of encouraging people to default on loans while also fostering distrust against the government, legal system, and constitution.
Without directly naming Durga Prasai, he implied that this same group was also fueling communal tensions.
Nagdhunga Tunnel Project stalled due to protests
Construction of the Nagdhunga-Sisnekhola Tunnel has been halted for 15 days due to ongoing local protests, despite nearing completion. Since mid-March, residents have blocked work over unresolved demands.
The delay has created uncertainty about the project’s completion, with authorities showing little urgency. Each day of inactivity costs the government nearly half a million dollars. Key tasks such as lighting, ventilation, and road concreting remain incomplete, potentially pushing back the planned October 2025 opening.
Government lifts age restriction for central bank Governor appointment
The government has revised the eligibility criteria for appointing officials in public institutions under the Ministry of Finance, eliminating the upper age limit for the Nepal Rastra Bank Governor role.
Previously, candidates had to be between 30 and 65 years old, but the new amendment allows appointments beyond 65.
Mustang sees a surge in tourist arrivals
Over a span of two days, Mustang recorded an influx of 14,853 domestic and foreign tourists, according to the District Police Office. Friday saw 9,556 arrivals, while Saturday recorded 4,297.
Most visitors were Nepalis traveling to Muktinath, with Indian nationals comprising the largest foreign group. Many undertook the journey for religious purposes at Kagbeni and Muktinath.
Pokhara International Airport commences regular international flights
Pokhara International Airport has officially started regular international flight operations. The first flight, operated by Himalayan Airlines from Lhasa, landed with 107 passengers, including 32 Chinese and 75 Nepali nationals. Gandaki Province Chief Minister Surendra Pandey and Chinese Ambassador Chen Song welcomed the passengers.
Resunga Airport resumes operations
Flights have resumed at Resunga Airport in Gulmi after being suspended for three and a half months due to aircraft maintenance.
Nepal Airlines’ flight from Kathmandu landed with 14 passengers and departed with four. Flights are scheduled to operate on Mondays and Thursdays.
Taringaun Airport in Dang resumes operations
Taringaun Airport in Tulsipur-12, Dang, resumed flight services on Monday after a three-month pause. Nepal Airlines Station In-charge Bal Bahadur Sunar announced that flights will now operate weekly on Mondays, with additional services based on demand.
Due to its small runway, the airport can only accommodate 19-seater planes, leading to frequent service disruptions.
Poor visibility disrupts international flights at TIA on Monday
Adverse weather conditions at Tribhuvan International Airport (TIA) led to flight diversions on Monday. Over six international flights, including those operated by Jazeera Air, Air India, and Fly Dubai, were redirected to Bhairahawa or India due to low visibility, which dropped to 1,600 meters—below the required standard for landing.
Pure Energy Limited to launch IPO
Pure Energy Limited plans to issue 1,195,200 IPO shares at NPR 100 each, starting from Chaitra 28, 2081 BS. The issuance will close on Baisakh 2, 2082, but may extend until Baisakh 11 if undersubscribed.
Of the total shares, 2% is reserved for locals in Banke District, 18% for the general public, and specific allocations for employees, mutual funds, and Nepali citizens working abroad.
Vandalism at Bhatbhateni Superstore in Koteshwar causes significant losses
Recent vandalism at Bhatbhateni Supermarket in Koteshwar, Kathmandu, has resulted in over NPR 8 million in damages. During royalist protests on Friday, activists looted goods worth NPR 6.49 million, as confirmed by COO Panu Paudel.
IPPAN urges NEA to extend RCOD for delayed hydropower projects
The Independent Power Producers’ Association, Nepal (IPPAN), has requested the Nepal Electricity Authority (NEA) to grant flexible extensions for the Revised Commercial Operation Date (RCOD) of delayed hydroelectric projects. Many projects have faced setbacks due to bureaucratic delays in acquiring permits for tree cutting and importing explosives from India.
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