KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The government’s policy and economic landscape in Nepal, as unveiled by President Ram Chandra Paudel, signals an ambitious yet complex agenda for fiscal year 2082/83 (2025/26), focused on public trust restoration through youth employment, governance reform, and infrastructure development.
While the policy roadmap targets 13 strategic areas—including federal stability, constitutional amendments, and reprioritization of development projects—key indicators reflect economic headwinds: stock market and bank EPS declines, NEA’s liquidity crisis, and a tourism shortfall.
Simultaneously, investment prospects are gaining traction through PPP initiatives and the Koshi Investment Summit, though inefficiencies persist, as seen in Bhairahawa Airport’s mismanagement and underutilization of ministry budgets.
The mixed signals—structural ambitions amid operational inefficiencies—underscore the tension between visionary planning and systemic execution challenges in Nepal’s current economic and governance trajectory.
President Paudel unveils govt’s Policy and Programs
President Ram Chandra Paudel addressed a joint session of the Federal Parliament on Friday, unveiling the government’s policy and program for the fiscal year 2082/83 (2025/26).
The meeting of both the House of Representatives and the National Assembly commenced at 3 PM in New Baneshwor. In accordance with Article 95 of the Constitution, the President laid out the government’s roadmap, which prioritizes restoring public trust—particularly among youth—through job creation, entrepreneurship support, skill development, startup incentives, and improved governance.
The strategy also seeks to boost public spending in high-priority areas. The Federal Parliament will hold debates on the proposal between Baisakh 22 and 28 (May 5–11), following which it will be formally adopted.
Stock market declines by 1.31% over the week
The Nepal Stock Exchange (NEPSE) recorded a 1.31% weekly decline, falling 35 points to close at 2,623 from last week’s 2,658. Due to the Labor Day holiday, trading occurred on only four days.
The market rose slightly on Sunday but dropped over the next three days. Despite the downturn, transaction volume remained high, with Sunday alone seeing trades worth Rs 10.87 billion.
Gold prices steady, silver edges up
Gold prices remained stable at NPR 183,500 per tola on Friday, while silver saw a slight increase, rising from NPR 1,915 to NPR 1,930 per tola, according to the Federation of Nepal Gold and Silver Dealers Association.
Government identifies 13 key focus areas for FY 2082/83
President Ram Chandra Paudel highlighted 13 strategic priorities for the upcoming fiscal year. These include reinforcing the federal democratic system and resisting anti-federalist movements.
A constitutional amendment process based on national consensus is also on the cards to resolve implementation loopholes. Stability in both governance and policymaking is emphasized. Additionally, development projects will be reprioritized based on feasibility, with unviable or flawed initiatives to be scrapped.
Commercial banks see slight decline in EPS
As of the end of Chait (March), the average earnings per share (EPS) for commercial banks fell slightly to Rs 14.27, compared to Rs 14.31 a year earlier. While EPS declined overall, banks saw moderate growth in distributable profits and capital. Ten banks reported an increase in shareholder returns, while ten others saw declines.
NEA faces cash crunch, seeks Rs 10 billion short-term loan
Despite reflecting high assets and recorded profits, the Nepal Electricity Authority (NEA) is experiencing a severe cash flow crisis. Executive Director Hitendra Dev Shakya revealed via a newly released white paper that the NEA’s account currently holds zero cash.
To address this, the authority is pursuing a Rs 10 billion short-term loan and has requested government approval. Shakya stated that although short-term loans are costly, there is no viable alternative.
Investment Board approves ambitious PPP strategy
The Investment Board Nepal (IBN) has approved its Strategic and Business Plan for 2081–86 BS, aiming to drive infrastructure development through the Public-Private Partnership (PPP) model.
The plan includes detailed targets and schedules for upcoming projects. IBN spokesperson Pradyumna Prasad Upadhyaya said the plan could be achieved if investment-friendly policies and adequate human resources are ensured.
Economic slowdown strains banking sector
Commercial banks in Nepal are under mounting stress due to an economic slowdown and a rising volume of non-performing loans (NPLs). In the third quarter, the average NPL ratio surged to 4.83% from 3.65% last year.
Himalayan Bank reported the highest NPL at 7.68%, followed by Kumari Bank at 6.98%. Everest Bank had the lowest, at just 0.64%. The Nepal Rastra Bank has flagged rising NPLs and shrinking capital adequacy as major financial sector risks.
Koshi Province summit highlights Rs 173.49 billion in investment projects
The Koshi Province Investment Summit, held in Biratnagar, featured 71 proposed projects with a combined value of Rs 173.49 billion. These span sectors such as tourism, agriculture, energy, and IT. Out of 45 international firms approached, 20 participated in person. Prime Minister KP Sharma Oli inaugurated the two-day event.
Health insurance made mandatory for officials and organized sector workers
The new fiscal policy mandates health insurance for all elected representatives, government employees, and workers in the organized sector. Previously optional, this insurance will now be compulsory and cover a range of health services beyond basic care. A benefits package is being developed to ensure comprehensive coverage.
Despite spending Rs 32 billion, Bhairahawa Airport faces functional issues
A parliamentary subcommittee report reveals that Bhairahawa Airport, despite consuming nearly Rs 32 billion in investment, suffers from major operational and planning flaws.
Key shortcomings include inadequate technical planning and absence of a commercial strategy. The investigation, led by UML MP Yogesh Bhattarai, found that land compensation and construction dominated spending without sufficient attention to viability.
Tourist arrivals lag behind target
The government’s ambitious target of attracting 1.6 million tourists in FY 2081/82 is likely to fall short. By the end of Chaitra, only 798,800 visitors had arrived. Even with optimistic projections, total arrivals are not expected to exceed 1.1 million—just 69% of the target.
Russian Company interested in Podway transit in Koshi
During the Koshi Summit, Russian firm Unitsky String Technologies expressed intent to invest in Podway transportation in Nepal. CEO Oleg Zaretsky said the system is well-suited for mountainous regions and that investment would be feasible if the government fosters a favorable environment.
Culture and Tourism Ministry lags in budget spending
The Ministry of Culture, Tourism, and Civil Aviation has utilized only 19.34% of its capital budget so far this fiscal year. Out of its Rs 5.02 billion total allocation, just Rs 56.41 million in capital expenditure has been spent. Recurrent expenditure was better, at 59% of the allocated Rs 2.49 billion.
NRB begins auction of Mangturam Group assets
Rastriya Banijya Bank has started auctioning off properties of the now-defunct Mangturam Group and affiliated firms in Biratnagar. The group defaulted on various loans including contract-based and industrial credits. Companies involved include Annapurna Soap, Ganesh Plastic, Dantakali Packaging, and others.
Agriculture Policy to Promote Exports and Credit Access
The government is drafting new agricultural policies aimed at boosting exports and improving access to loans. Plans include digitizing agricultural services, deploying technical staff at the local level, upgrading quarantine and lab facilities, and expanding agricultural insurance. Subsidy rates will also be revised to reflect current needs.
Over 4,000 EVs enter Nepal via Rasuwagadhi
Between July and February of FY 2081/82, 4,637 electric vehicles were imported through the Rasuwagadhi border point. Customs data show that Rasuwagadhi handled most of these entries. Revenue collection during this period nearly matched targets, reaching Rs 19.14 billion out of the Rs 19.47 billion goal.
75 road projects underway in Karnali Province
The Department of Roads is executing 75 road projects across all 10 districts in Karnali Province. Out of over 2,200 planned kilometers, about 771 have been blacktopped and 264 graveled. Another 676 km of earthen roads have also been completed.
14 kilometers of road blacktopped on Beni–Jomsom–Korala Highway
Progress has been made on the Beni–Jomsom–Korala road, with 14 kilometers paved on the Rahughat–Tatopani stretch. Originally contracted in 2017 for Rs 660 million, the project includes drainage systems and road widening across multiple settlements along the route.
Prabhu Mahalaxmi proposes 8.42% dividend
Prabhu Mahalaxmi Life Insurance has proposed an 8.42% dividend to its shareholders, including 8% bonus shares and 0.421% cash. The proposal, pending regulatory approval, is based on profits from FY 2080/81.
Work begins on 6.5 MW Darkhola Hydropower Project
Construction has started on the 6.5-megawatt Darkhola Hydropower Project in Myagdi. Access roads have been built and pipeline installation has commenced. The project aims to channel water via a 3.1 km penstock to a powerhouse at Solwang.
Kushma Tax Office issues 15-day deadline to firms
The Kushma-based Taxpayer Service Office has issued a 15-day notice to 146 firms in Parbat for failing to update tax filings. Some businesses have not submitted tax returns for years—Nexa Construction hasn’t filed in 19 years. The office warns of penalties for continued non-compliance.
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