KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Despite an increase in trading activity, Nepal’s stock market posted a third consecutive decline, with the NEPSE index dropping by 8.14 points to close at 2,623, indicating persistent investor caution.
While the trading volume surged to NPR 9.37 billion, gains were limited to a few sectors such as hydropower, microfinance, and trade, while major sectors like banking, finance, and tourism experienced notable losses.
This subdued market performance occurs against a backdrop of mixed economic indicators: Nepal’s projected GDP growth of 4.61% and a rise in per capita income to USD 1,517 suggest signs of recovery, especially from non-agricultural sectors.
However, persistent structural issues remain—revenue collection has failed to meet targets for three consecutive years, over 29% of industries do not comply with minimum wage laws, and high-profile infrastructure projects like the Gautam Buddha International Airport suffer from weak oversight.
Furthermore, policy interventions such as Nepal Rastra Bank’s plan to absorb excess liquidity and regulatory changes to procurement laws reveal ongoing efforts to stabilize the financial system.
Altogether, these developments reflect an economy striving for growth amid deep-rooted fiscal and institutional inefficiencies that continue to dampen investor confidence and economic resilience.
Nepal stock market drops by 8.14 points despite rise in trading volume
The Nepal Stock Exchange (NEPSE) index declined for the third consecutive session on Wednesday, falling by 8.14 points to close at 2,623. The day’s highest point was 2,642.
Despite the drop in the index, trading activity saw a notable uptick, with the total transaction volume reaching NPR 9.37 billion—up from NPR 7.57 billion the previous day.
Among 314 traded companies, 136 saw declines in share prices, one remained unchanged, and a few posted gains. Most sector indices closed in the red.
The banking sector dipped by 0.70%, development banks by 1.06%, finance by 1.24%, and hotel and tourism by 0.50%. Losses were also recorded in life insurance, investment, manufacturing, non-life insurance, and miscellaneous sectors, with declines ranging from 0.07% to 1.16%.
In contrast, modest gains were seen in hydropower (0.61%), microfinance (0.04%), and trade (0.40%).
Gold and silver prices drop slightly in Nepal
The price of hallmark gold in Nepal dropped to NPR 188,100 per tola on Wednesday, down from NPR 188,800 the previous day. Silver prices also declined slightly to NPR 1,965 per tola, compared to NPR 1,970 the previous day, according to the Federation of Nepal Gold and Silver Dealers’ Association.
Nepal’s economy projected to grow by 4.61% this fiscal year
The National Statistics Office has projected Nepal’s economic growth at 4.61% for the current fiscal year, based on its preliminary national accounts estimates. This follows a revised growth rate of 3.67% for the previous fiscal year, which had initially been recorded at 3.87%.
The estimate, calculated at consumer prices, points to a gradual economic rebound. The total size of the economy is expected to hit NPR 6.107 trillion by the end of FY 2081/82, up from NPR 5.704 trillion in the prior fiscal year.
NRB to pull NPR 50 billion from financial system to absorb excess liquidity
Nepal Rastra Bank (NRB) plans to withdraw NPR 50 billion from the banking system on Wednesday as part of its ongoing effort to manage surplus liquidity. The central bank will use its deposit collection tool for a 21-day term to absorb the funds.
Banks and financial institutions were invited to submit online bids by 3 PM. NRB has been conducting similar liquidity absorption operations twice weekly—on Sundays and Wednesdays—for the past 18 months due to persistent oversupply of funds in the financial sector.
Per capita income in Nepal to reach USD 1,517 this year
Nepal’s per capita gross national income (GNI) is projected to rise to USD 1,517 by the end of the current fiscal year, according to new figures from the National Statistics Office.
This represents a USD 50 increase from last year’s per capita GNI of USD 1,467, which itself had gone up by USD 57 from the previous year. While the income trend continues upward, the rate of increase has slightly slowed.
The GNI figure represents the average income per person, reflecting overall national earnings relative to the population.
Revenue collection falls short of targets for three straight years
Despite setting ambitious revenue targets, the government has consistently failed to meet them over the past three years. In fiscal year 2078/79, only 77.19% of the target was achieved, and just 74.43% the year before.
So far this year, only 61% of the expected revenue has been collected by mid-Baisakh. However, the government continues to raise its targets, with this year’s budget set at NPR 1.86 trillion and next year’s target expected to climb even higher to NPR 1.9 trillion, as per the National Planning Commission.
Subcommittee submits weak report on GBIA construction issues
A parliamentary subcommittee formed to investigate irregularities in the construction of Gautam Buddha International Airport (GBIA) in Bhairahawa has submitted a report that has been criticized as weak.
Led by former tourism minister and CPN-UML lawmaker Yogesh Bhattarai, the subcommittee failed to adequately address financial discipline, spending transparency, or provide a proper breakdown of the NPR 31.82 billion used in the project.
Members of the committee included MPs such as Achyut Prasad Mainali, Dr. Amaresh Kumar Singh, and others. Critics, including members of the Audit Committee, expressed concern that the report ignored major issues observed during field inspections.
Investment board approves structure and strategy
The Investment Board of Nepal has approved its new organizational structure and business strategy during its 61st meeting, chaired by Prime Minister KP Sharma Oli.
The board has also approved the post of a secretary and directed the office to complete a management survey based on the new structure. According to spokesperson Pradyumna Prasad Upadhyaya, the board plans to sign deals for 42 major projects worth USD 17.92 billion (NPR 2.45 trillion) by fiscal year 2085/86.
No progress on social media registration despite repeated orders
Despite multiple government orders, platforms like Facebook have not registered in Nepal. The government has extended the registration deadline several times, but no progress has been made.
Minister for Communications and Information Technology Pradeep Subba Gurung recently gave a one-week deadline, but platforms, including Facebook’s parent company Meta, have not complied. Previously, TikTok had registered after facing a ban, but other platforms remain unregistered.
Non-agricultural sector expected to fuel Nepal’s 4.61% GDP growth
According to the latest projections by the Central Statistics Office, Nepal’s economy is set to expand by 4.61% this fiscal year, largely driven by gains in non-agricultural sectors. These sectors are forecast to grow by 4.28%.
Meanwhile, the agricultural sector is expected to record a 3.28% increase. Rishiram Sigdel, Director of the National Accounts Division, said the projections reflect continued recovery momentum, with industry and services playing a leading role.
Over 29% of industries fail to pay minimum wage
A new report from GEFONT reveals that more than 29% of industries in Nepal have not implemented the minimum monthly wage of NPR 17,300. The labor audit covered 327 businesses across sectors such as manufacturing, textiles, tourism, education, and healthcare, and found widespread noncompliance with labor laws.
SEBON approves IPO for Bikash Hydropower
The Securities Board of Nepal (SEBON) has approved Bikash Hydropower Company’s request to issue an IPO. The company will now issue 4.45 million shares worth NPR 445.46 million at a face value of NPR 100 per share. Prabhu Capital will manage the IPO process.
Procurement rules amended again to ease deadline extensions for contractors
Nepal’s procurement regulations have been amended for the 14th time to allow easier extension of project deadlines. Contractors must now submit valid reasons for project delays, and applications for deadline extensions must be filed within 30 days of the amendment’s publication in the official gazette.
Yarsagumba harvesting begins in Manang
The collection of Yarsagumba (Cordyceps sinensis), a valuable medicinal herb, has started in Manang district. The harvesting season lasts from mid-Baisakh to the end of Asar. Locals collect the herb with permits issued by the Annapurna Conservation Area Project, following regulations and guidelines for conservation areas, national parks, and buffer zones.
Nepal to import 119,000 metric tons of fertilizer for paddy farming
To prevent a fertilizer shortage, Nepal is importing an additional 119,000 metric tons of fertilizer, including 94,000 metric tons of urea and 25,000 metric tons of DAP.
The fertilizer is expected to arrive by the second week of Jestha, with shipments being handled by Agricultural Inputs Company Limited and Salt Trading Corporation.
Gold traders can no longer charge recommendation fees
Nepal Rastra Bank has barred gold traders’ associations from charging fees for issuing purchase recommendations. The new rule came after complaints about unfair charges. According to the NRB, all associations must now offer recommendations to traders for free.
Hilsa border reopens but Mansarovar pilgrimage still banned
Though the Hilsa border point with China reopened last year, the pilgrimage route to Kailash-Mansarovar remains closed. China shut down the route during the COVID-19 pandemic and has not reopened it since.
The route had been used by around 15,000 Indian pilgrims annually before the closure. Temporary aerial tours had been launched but were later discontinued due to high costs and limited interest.
Wheat output expected to fall in Kailali
Wheat production in Kailali district is expected to decline slightly this year. According to the Agricultural Knowledge Center, average yield per hectare is estimated at 3.35 metric tons, down from 3.42 metric tons last year. The estimate is based on surveys in 11 local units, excluding hill areas like Chure and Mohanyal.
Helicopter flights banned in Sagarmatha region during peak season
Commercial helicopter flights have been banned in the Sagarmatha region during the busy mountaineering season. Khumbu Pasang Lhamu Rural Municipality issued a public notice warning against such operations and package sales, holding the responsible authorities accountable for any violations.
Rule removed requiring manpower companies to send 100 workers abroad
The mandatory rule requiring manpower companies to send at least 100 workers abroad annually has been scrapped. This provision, part of the Foreign Employment Act, was repealed through a recent bill passed by the House of Representatives. The rule had been in place since 2019 and was heavily opposed by manpower agencies.
Comment