KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The NEPSE index experienced a slight gain of 3.35 points, closing at 2,703.39, with a significant increase in trading volume, indicating heightened market activity.
Meanwhile, the World Bank projects Nepal’s economic growth at 4.5% for FY25, driven by domestic trade and hydropower, despite risks such as geopolitical instability and bureaucratic inefficiencies.
Gold prices in Nepal reached a record high, contrasting with a decline in silver prices. Insurance claims from recent pro-monarchy protests exceeded Rs. 48.7 million, with delays in settlement raising concerns.
The Nepal Rastra Bank’s report exposed weaknesses in the banking sector, including regulatory breaches and loan mismanagement. In international trade, Nepal faces a 10% U.S. tariff under new reciprocal policies.
The Supreme Court declined an interim order for the reinstatement of former NEA MD Kulman Ghising, prolonging legal proceedings. Nepal Reinsurance Company reported a 27.41% profit decline, reflecting financial sector struggles.
The federal government has allocated NPR 150 billion for revenue sharing among provinces and local levels. Other economic developments include India renewing BIS certification for Nepali cement and plywood, and the government mandating price transparency for cement and iron rod manufacturers.
Additionally, thick fog disrupted flights at Tribhuvan International Airport, and internal migration trends revealed that 29.2% of Nepal’s population has relocated within the country.
NEPSE gains slightly as trading volume soars
The NEPSE index on Thursday edged up by 3.35 points to close at 2,703.39. Trading volume surged significantly, with total turnover reaching NPR 7.23 billion, up from NPR 5.44 billion on Wednesday—a rise of NPR 1.79 billion.
Out of 324 securities traded, 93 saw gains, while 151 declined. Green Ventures led the gains, rising 9.99% to NPR 505.20 per share, while Super Madi Hydropower climbed 6.09% to NPR 955.80 per share.
Conversely, Upakar Laghubitta suffered the largest loss, dropping 9.10% to NPR 3,256.10, followed by Guardian Micro Insurance, which fell 6.86% to NPR 2,405.
Himalayan Reinsurance recorded the highest turnover, making it the most actively traded stock of the day.
Nepal’s economy expected to expand by 4.5% in FY25: World Bank
The World Bank anticipates Nepal’s economy to grow by 4.5% in FY25, an increase from 3.9% in FY24, despite setbacks from natural disasters in late 2024. Growth will be driven by domestic trade, hydropower production, and improved paddy yields, as highlighted in the latest Nepal Development Update.
Looking ahead, the report predicts an average growth rate of 5.4% for FY26 and FY27, propelled by the services sector. However, risks such as geopolitical tensions, financial instability, bureaucratic inefficiencies, and delays in capital expenditure could impact progress.
Gold price hits record high in Nepal
Gold prices in Nepal reached an all-time high of NPR 180,300 per tola, increasing by NPR 1,200 in a day. Meanwhile, silver prices dropped by NPR 25 per tola, settling at NPR 1,995.
Insurance claims from Kathmandu pro-monarchy violence surpass Rs. 48.7 million
The recent pro-monarchy protests in Kathmandu caused significant property damage, resulting in insurance claims exceeding Rs. 48.7 million. As of April 2, 43 claims have been submitted to 11 insurance companies, according to the Nepal Insurance Authority.
Rastriya Beema Company received the highest claims, totaling Rs. 127 million from two cases, followed by Siddhartha Premier Insurance with Rs. 117.5 million from eight claims. Other major claimants include Sagarmatha Lumbini Insurance (Rs. 68.91 million), Neco Insurance (Rs. 52 million), and Oriental Insurance (Rs. 47.5 million).
So far, only Shikhar Insurance has settled three claims, paying Rs. 45,012. Despite a directive from the Insurance Authority on March 30 to expedite settlements, most claims remain unresolved, raising concerns over delays in compensating affected businesses and individuals.
Nepal Rastra Bank report exposes banking sector weaknesses
The Nepal Rastra Bank’s FY 2023/24 supervision report has revealed lapses in loan monitoring and risk management within the banking sector. Some banks failed to track loan utilization, approved loans without proper documentation, and classified misused loans as pass loans.
Regulatory breaches included issuing personal loans over Rs. 50 lakh without clear purposes and failing to meet audit requirements by appointing only one auditor instead of three. The report also highlighted financial fraud risks, digital banking vulnerabilities, and concerns over Nepal’s “grey list” status in anti-money laundering enforcement.
PM Oli advocates for climate action and prosperity at AIT, Thailand
Prime Minister KP Sharma Oli addressed an event at the Asian Institute of Technology (AIT) on April 3 during his official visit to Thailand. He reiterated Nepal’s commitment to prosperity, security, and human dignity under the vision of “Prosperous Nepal, Happy Nepali” and called for global collaboration on climate change.
AIT has strong ties with Nepal, with 181 Nepali students currently enrolled and 1,795 alumni. Nepal’s Ambassador Dhan Bahadur Oli highlighted that Nepali students constitute the fourth-largest group among AIT’s international students.
Supreme Court rejects interim order for Kulman Ghising’s reinstatement
The Supreme Court has declined to issue an interim order for the reinstatement of former Nepal Electricity Authority (NEA) Managing Director Kulman Ghising. A bench comprising Justices Kumar Chudal and Nityananda Pandey ruled against immediate reinstatement after a three-day hearing.
Ghising had filed a writ challenging his dismissal, naming the government, the Energy Ministry, and the newly appointed MD Hitendra Dev Shakya as respondents. Meanwhile, Shakya has also filed a petition to resolve his previous removal case. The court will hold further hearings to decide on the matter.
Nepal faces 10% U.S. tariff
U.S. President Donald Trump has introduced reciprocal tariffs, affecting global trade dynamics. Under this policy, the U.S. imposes tariffs equivalent to those set by other countries on American products.
Nepal previously imposed a 30% import duty on wool and high-quality animal hair-based fabrics from the U.S., while Nepalese exports to the U.S. were exempt from tariffs. With the new policy, Nepalese goods will now face a 10% tariff in the U.S. market.
Nepal reinsurance company’s profit ceclines by 27.41%
Nepal Reinsurance Company (Nepal Re) reported a net profit of Rs. 1.13 billion for the fourth quarter of FY 2080/81, reflecting a 27.41% decline from Rs. 1.55 billion in the previous fiscal year.
Insurance premium earnings dropped by 4.91% to Rs. 10.58 billion, while net premiums fell 3.91% to Rs. 9.49 billion. The company’s earnings per share (EPS) declined from Rs. 12.17 to Rs. 8.43, with a net worth per share of Rs. 145 and a P/E ratio of 92.04.
Revenue sharing for provinces and local levels set at NPR 150 billion
The federal government has finalized a revenue-sharing framework for FY 2082/83 to 2086/87, allocating NPR 150 billion for the upcoming fiscal year. Provinces and local governments will each receive Rs. 78.08 billion.
Revenue is primarily derived from VAT and excise duties, with 70% retained by the federal government and the remaining 30% divided equally between provinces and local levels. Vehicle tax collection remains under provincial jurisdiction.
Wean Nepal Laghubitta issues further public offering (FPO)
Wean Nepal Laghubitta has launched an FPO of 51,292 shares at a face value of NPR 100 per share. Investors can apply until Chaitra 26, with a possible extension to Baisakh 4 if required. CARE Ratings Nepal has assigned the company a “Single B” rating, indicating a high financial risk.
Thick fog disrupts flights at Tribhuvan International Airport
Thick fog caused significant flight disruptions at Tribhuvan International Airport (TIA) on Thursday morning, leading to delays and diversions. Flights are operating under Instrument Flight Rules (IFR), slowing down aircraft management.
Five mountain flights departing from Kathmandu were rerouted due to low visibility. Among them, two Buddha Air flights were redirected to Bhairahawa, one to Janakpur, while Yeti Airlines and Shree Airlines each diverted one flight to Bhairahawa.
India renews BIS certification for Nepali cement and plywood
India has renewed the Bureau of Indian Standards (BIS) certification for Nepali cement and plywood, allowing exports to resume after months of restrictions. Diplomatic efforts, including ministerial meetings, helped secure the renewal, benefiting multiple Nepali industries.
Over 29% of Nepal’s population engaged in internal migration
A government study shows that 29.2% of Nepal’s population has migrated internally, with the highest rate in the hill regions at 32%. Women account for 37.6% of internal migrants, while the Terai region has seen significant in-migration over the years.
Govt directs cement and iron rod manufacturers to display factory prices
The government has mandated cement and iron rod manufacturers to clearly display factory gate prices on packaging. Additionally, dealers must present maximum retail prices before sale to prevent price manipulation. This decision follows widespread public complaints over arbitrary price hikes.
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