KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The text highlights significant economic and infrastructural developments in Nepal, including advancements in the finance, energy, and insurance sectors.
The Ministry of Finance has expedited the budget process for FY 2082/83, with an increased focus on policy details and key discussions involving various stakeholders.
Meanwhile, the Nepal Electricity Authority (NEA) is working to expand power infrastructure with the construction of new substations in the Kathmandu Valley, aiming to meet future energy demands.
The stock market continues to show growth, supported by strong liquidity and low interest rates.
On the other hand, issues like the increase in non-performing loans, delays in compensation for Birgunj Dry Port landowners, and protests by victims of Smart Telecom’s license cancellation underscore ongoing challenges in the financial and infrastructure sectors.
Additionally, the growth of Nepal’s life insurance business and developments in solar energy projects reflect progress in the country’s broader economic landscape.
However, the delay in action on key issues such as unpaid financial liabilities and compensation highlights systemic inefficiencies that need urgent attention.
Finance Ministry accelerates budget process for FY 2082/83
The Ministry of Finance has set a budget ceiling of Rs 1900 billion and started working on estimates for FY 2082/83.
Ministries are required to submit policy details by mid-April. Key discussions will involve political leaders, economists, and experts. The budget is set to be presented in Parliament on Jestha 15, with committees overseeing the drafting and revenue planning process.
Himalaya Airlines to start regular Pokhara-Lhasa flights
Himalaya Airlines will begin regular flights between Pokhara International Airport and Lhasa, Tibet, starting March 31.
The Civil Aviation Authority of Nepal confirmed that ticket bookings are already open following slot approval from Lhasa Gonggar Airport.
Stock market experiences continuous growth
Nepal’s stock market continued its upward trend for the second week in a row, with NEPSE closing at 2,815.04 points, up by 71.3 points.
Trading remained active for four days, totaling NPR 43.93 billion in transactions, surpassing last week’s NPR 38.58 billion.
Market capitalization grew by NPR 120 billion, reaching NPR 4.67 trillion. NEPSE formed a new higher high, indicating strong market sentiment.
Key factors include increasing daily turnover (averaging nearly NPR 11 billion), rising price trends, and abundant liquidity.
As long as bank interest rates remain below double digits, the market is expected to stay bullish.
NEA expands power infrastructure in Kathmandu Valley
The Nepal Electricity Authority (NEA) is constructing six 132/11 kV substations in Kathmandu and Bhaktapur to improve power reliability.
The Teku substation is already operational, and Futung and Mulpani are expected to begin within two months.
The Chobhar substation will open by Ashar, and Thimi will start in eight months.
These substations, with a total capacity of 500 MW, are part of NEA’s long-term plan to meet a projected 3,100 MW demand by 2050.
Funded by the government, ADB, JICA, and the World Bank, the upgrades include underground cabling, automation, and a 220 kV transmission ring for future power security.
NRB to increase Non-Performing Loans by over NPR 100 billion
Nepal Rastra Bank (NRB) has made a decision that will increase non-performing loans (NPLs) in the banking sector by over NPR 100 billion.
NRB had previously provided relief to construction businesses, allowing them to defer loan repayments until Mangsir 2081, but this policy is now being withdrawn.
Banks have provided NPR 207.99 billion in loans to the construction sector, with a significant portion linked to government infrastructure projects.
With the government yet to clear NPR 40 billion in dues, construction businesses are warning of protests and calling for an extension of financial relief until payments are settled.
Life insurance sector grows by 28.05 percent
The life insurance industry in Nepal has grown by 28.05% in new business, according to the Nepal Insurance Authority.
In the first seven months of the current fiscal year, 14 life insurance companies collected NPR 18.43 billion in first-year premiums, compared to NPR 14.39 billion during the same period last year.
Nepal Life led with NPR 4.59 billion in premium collection, a 39.04% increase from the previous year. National Life followed with NPR 2.73 billion (24.09% growth), while LIC Nepal ranked third with NPR 1.54 billion (28.92% growth).
Civil Aviation Authority reverses Airbus Helicopter import ban
Nepal’s Civil Aviation Authority (CAAN) has reversed its decision to ban the import of Airbus helicopters following opposition from the aviation industry.
Airlines argued that the ban was impractical, and while CAAN initially defended the decision, it later clarified that no formal decision had been made. This controversy comes as Nepal continues its efforts to lift the EU’s 12-year aviation ban.
Foreign Employment Insurance generates nearly NPR 2 billion in premiums
Nepal’s life insurance companies have collected almost NPR 2 billion in premiums from foreign employment insurance policies.
According to the Nepal Insurance Authority, premiums totaled NPR 1.97 billion in the first seven months of the current fiscal year, marking a 15.09% increase compared to NPR 1.71 billion last year.
Local govt approval now required for solar projects
The Department of Electricity Development has amended regulations, making local government approval mandatory for solar projects.
This change addresses jurisdictional disputes, particularly over land classification. Projects over 1 MW must now obtain local government recommendations, eliminating the need for prior approval from the Irrigation Department, and ensuring protection of farmland while promoting solar energy development.
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