KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is showing a mixed but cautiously improving outlook, with strong remittance inflows, a widening external surplus, and continued monetary easing helping offset sectoral stresses and governance challenges. While the NEPSE index and gold prices dipped slightly amid subdued market sentiment, remittances surged by 35.4 percent and exports jumped nearly 90 percent, strengthening the current account and Balance of Payments.
The Nepal Rastra Bank responded by further loosening credit conditions to push excess liquidity into the real economy, even as concerns persist about non-productive lending. However, fiscal pressure and structural weaknesses remain evident—telecom forex outflows soared, floods caused over Rs 6.67 billion in agricultural losses, sugar mills face rising smuggling-induced distortions, and stalled infrastructure contracts continue to be terminated.
At the same time, governance efforts are visible through blacklisting of non-performing contractors, forced compliance in stalled bidding processes, and corporate contributions to reconstruction. Business activity shows pockets of momentum—new share issuances, an IPO for migrant workers, and a major global tech investment—suggesting capital mobilization is increasing despite persistent systemic hurdles.
NEPSE edges down as turnover dips on Tuesday
The Nepal Stock Exchange (Nepse) index slipped slightly on Tuesday, falling 0.53 points to close at 2644.70. The day’s peak stood at 2652 points, reached around 12:51 pm. Market turnover also declined, dropping to Rs 4.48 billion from Monday’s Rs 4.71 billion. A total of 125 listed firms saw gains, while 119 declined. Six companies—including Sagar Distillery, Swastik Laghubitta, and Jhapa Energy—recorded a 10 percent jump in share prices, even as sectors such as banking, microfinance, and life insurance posted minor losses.
Gold dips slightly while silver edges up
Gold prices eased marginally on Tuesday amid global market fluctuations and shifting demand. The Federation of Nepal Gold and Silver Dealers’ Association set the rate for fine gold at Rs 253,300 per tola, down from Rs 253,600 on Monday. Silver prices, however, rose to Rs 3,545 per tola, compared to Rs 3,535 a day earlier.
Remittance inflows jump 35.4 percent in first quarter
Remittances surged by 35.4 percent in the first three months of the current fiscal year, reaching Rs 553.31 billion, according to Nepal Rastra Bank. This marks a major rise compared to the 11.9 percent increase in the same period last year, which had totaled Rs 408.77 billion. The current account surplus stood at Rs 237.59 billion, while the Balance of Payments recorded a surplus of Rs 264.03 billion. Merchandise exports grew by 89.6 percent, and imports rose by 19.8 percent.
NRB keeps monetary policy flexible, widens credit access in quarterly review
In its first quarterly review of the 2025/26 monetary policy, Nepal Rastra Bank announced continued flexible measures alongside further easing in credit access. Citing signs of economic stabilization after the Gen Z protests, the bank offered loan restructuring options for entrepreneurs in flood- and landslide-hit districts—such as Ilam—provided they pay 10 percent interest. The Standing Liquidity Facility (SLF) rate was reduced from 6 percent to 5.75 percent, and the policy rate from 4.50 percent to 4.25 percent. Individual overdraft limits were doubled to Rs 10 million, and microfinance collateralized loan ceilings were raised to Rs 1.5 million.
NRB relaxes credit rules to boost liquidity flow and support economy
Nepal Rastra Bank has gradually loosened lending rules in a bid to channel the banking sector’s excess liquidity—currently about Rs 1.1 trillion—into the real economy. Recent steps include doubling the individual overdraft ceiling from Rs 5 million to Rs 10 million and raising the collateralized lending cap for microfinance borrowers from Rs 700,000 to Rs 1.5 million. While some concerns remain about loans shifting to non-productive uses, the central bank views the relaxed measures as necessary to stimulate consumption and counter subdued demand in the productive sector.
Telecom sector sees Rs 9.1 billion outflow for equipment and bandwidth
The telecommunications sector spent Rs 9.1 billion on equipment imports and bandwidth payments in fiscal year 2024/25, according to the Nepal Telecommunications Authority. The figure includes Rs 3.54 billion recommended for equipment-related foreign exchange and Rs 5.55 billion for bandwidth dues. This marks a sharp surge compared to the previous year, when foreign exchange recommendations had dipped due to a court dispute, limiting equipment imports to Rs 719.6 million and bandwidth payments to Rs 1.19 billion.
Floods and rains cause Rs 6.67 billion loss to agriculture and livestock
Heavy rains, floods, and landslides during two separate periods in September and October inflicted more than Rs 6.67 billion in losses on the agriculture and livestock sector, according to the Ministry of Agriculture and Livestock Development. National paddy output is projected to fall by five to seven percent due to the damage. Koshi Province suffered the highest losses, exceeding Rs 2.54 billion. October’s late rains alone caused Rs 2.91 billion in destruction, mostly hitting ripening paddy crops.
Sugarcane farmers lift highway protest after talks with government
Sugarcane growers have temporarily called off their planned indefinite blockage of the national highway in Hariwan, Sarlahi, which was set to begin December 1. The pause comes after positive negotiations between the Nepal Sugarcane Producers Federation and the government on support prices and unpaid subsidies. Following a written request from the Minister of Agriculture and Livestock Development, the Federation agreed to suspend protests for two weeks. Farmers are demanding immediate payment of the remaining Rs 35 per quintal subsidy and the implementation of a scientific support price of Rs 710 per quintal.
Finance Minister urges stronger protection of national assets
The Finance Minister has emphasized the need for all sectors to safeguard public and private assets, stressing that creations of both government and private institutions represent national wealth. Speaking at the 29th anniversary of the Society of Economic Journalists–Nepal (SEJON), he underscored the importance of responsible use of taxpayer money. He also warned that misinformation and unverified reporting could harm international relations and the investment environment. Meanwhile, the industry minister stated that the government is prioritizing good governance, improved service delivery, and investor security to build confidence in the private sector.
PPMO blacklists two firms for three years over contract violations
The Public Procurement Monitoring Office has blacklisted two construction and supply firms for three years. One was penalized following a recommendation from the Janata Tatbandh Program Office in Mahottari, and the other based on a recommendation from Helambu Rural Municipality, Sindhupalchok. As per Section 63(1) of the Public Procurement Act, 2007, both companies are barred from participating in any procurement process during the blacklisting period after failing to meet contractual obligations.
Ministry orders Butwal market committee to open 68 stalls for bidding
The Department of Agriculture has directed the Butwal Agricultural Produce Market Operations Committee to immediately open bids for 68 stalls and comply with a district court ruling. Despite receiving 267 bids after a tender notice published on September 9, 2024, the committee had not opened them. After the court’s final verdict on November 6 instructing immediate action, the ministry issued a follow-up letter on December 1 demanding compliance without further delay.
Sugar stock rises to 10,000 tons as smuggling undercuts local mills
Three sugar mills in Madhesh Province are holding over 10,000 tons of unsold sugar as they struggle to compete with cheaper smuggled sugar from India. Illegal imports are being supplied to retailers at around Rs 67 per kg—far lower than the domestic price of Rs 80 per kg—sharply reducing local sales. Reliance Sugar Mill (Bara), Everest Sugar Mill (Mahottari), and Indu Shankar Sugar Mill (Sarlahi) together have a stockpile of about 10,300 tons. Producers estimate that up to 40,000 tons of sugar enter Nepal illegally each year, causing significant revenue losses.
Contract canceled for 22.66 km stretch of Postal Highway
The Postal Highway Directorate has terminated the contract for constructing the 22.66-kilometer Inaruwa–Kaptanganj section in Sunsari, citing extremely slow progress. The contract—worth Rs 527 million and awarded in January 2022—had achieved only about 18 percent completion. After repeated warnings went unheeded, the Directorate canceled the agreement and initiated the process to seize the contractor’s Rs 169.4 million performance bond and recover advance payments with 10 percent interest.
27 km of Beni–Jomsom–Korala road blacktopped after 19 years
A 33-kilometer stretch of the Beni–Jomsom–Korala road in Myagdi has finally been blacktopped after nearly two decades of work. The 16.5-km Nagdhunga–Kaikukhola section saw 11 km paved at a cost of Rs 630 million, while 15 km of the 19-km Rahughat–Nagdhunga section was completed at Rs 660 million. Several motorable bridges have also been constructed, along with bailey bridges over Bhurungkhola and Rupsekhola, significantly improving access toward Mustang.
Nepal Life adds Rs 15 million to reconstruction fund
Nepal Life Insurance Company Ltd. has contributed an additional Rs 15 million to the government’s Physical Infrastructure Reconstruction Fund, raising the fund’s total to Rs 118.2 million as of Sunday. The contribution, made under the company’s CSR commitments, is aimed at supporting rebuilding and recovery efforts following the Gen Z protest-related damages on September 8 and 9. Senior company officials handed over the cheque to the Finance Minister.
Private operator leads forex outflow in telecom sector
A private mobile operator and a major internet service provider topped the telecom industry’s foreign exchange outflow in fiscal year 2024/25. The mobile operator received the highest foreign exchange recommendation for equipment imports at Rs 2.73 billion, followed by the state-run telecom company at Rs 812.7 million. For bandwidth payments, the same mobile operator again led with Rs 2.14 billion in forex recommendations, while a leading ISP followed at around Rs 1.5 billion. The Nepal Telecommunications Authority (NTA) said it continues monitoring operators to curb misuse or fraudulent forex requests.
Kamana Sewa Bikas Bank gets approval to issue preference shares
The Securities Board of Nepal (SEBON) has approved a development bank’s plan to issue 3.5 million units of unredeemable, non-cumulative preference shares. Priced at Rs 100 per unit with a 9 percent dividend rate, the issuance was endorsed by the bank’s 18th annual general meeting. The move is expected to strengthen the bank’s capital base and help expand its operations. The approval follows a recent Nepal Rastra Bank circular allowing BFIs to issue such shares as an alternative to rights shares to bolster capital adequacy.
Salpa Development Bank to open IPO for Nepalis abroad from December 11
Salpa Development Bank will open the first phase of its IPO for Nepali migrant workers starting December 11. The bank is issuing 5,223,880 shares, representing 33 percent of its total capital. Of the public portion, 172,388 shares are reserved for Nepalis working abroad. Eligible applicants may apply for a minimum of 10 shares and a maximum of 25,000. The subscription closes on December 15 but may extend to December 25 if undersubscribed.
Nvidia invests USD 2 billion in Synopsys to accelerate AI-driven chip design
Nvidia has announced a USD 2 billion investment in Synopsys as part of an expanded, multi-year partnership to co-develop AI-powered chip design tools. The collaboration aims to transition complex simulations—from semiconductors to jet engines—from CPU-based systems to Nvidia’s GPU platforms. Executives from both companies said GPU-accelerated workflows could reduce processes that once took weeks to just a few hours. The agreement is non-exclusive and will provide Synopsys with added flexibility as it adapts its software for AI-enhanced design environments.
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