KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic indicators reflect a complex blend of progress and structural challenges across sectors. On one hand, tourism reached a historic high in April 2025, with over 116,000 visitors signaling a rebound in the service economy, while GDP growth of 4.61%—led by energy, trade, and remittances—suggests moderate but steady macroeconomic performance.
Infrastructure projects like the Upper Thulo Khola hydro plant near completion, and the Koshi Investment Summit has attracted over Rs 152 billion in domestic commitments, indicating renewed investor interest in energy, industry, and hospitality.
However, persistent delays in budget implementation, a 21-month freeze on IPO approvals affecting Rs 2.3 trillion in hydropower investments, and policy deadlock—evident in the stagnant stock market—have dented investor confidence.
While social protection measures like mandatory Social Security Fund enrollment and vocational training initiatives by Kathmandu Metropolitan City aim to strengthen the labor market, weak governance and regulatory uncertainty, including penalties issued by Nepal Rastra Bank to multiple commercial banks, highlight the fragility of financial oversight.
Overall, Nepal is making notable strides in certain areas, but the effectiveness of these gains hinges on policy clarity, institutional reforms, and efficient project execution.
Nepal sees record tourist arrivals in April 2025
April 2025 marked Nepal’s highest-ever foreign tourist arrivals, with 116,490 visitors. The majority came from India (25,933), followed by the US, China, and the UK. Despite the growth, numbers from India and China saw no major spike. The Nepal Tourism Board called the milestone a promising sign for the industry.
Stock market stagnation reflects policy deadlock, investor confidence weak
Nepal’s stock market continues to hover between the 2,500–2,800 NEPSE index range, reflecting policy uncertainty. Delays in appointing a central bank governor and inconsistent fiscal direction have undermined investor confidence. Experts note a lack of strategic reforms, poor stock quality, and minimal female investor participation as key concerns.
Birgunj Dry Port collects Rs 36.83 billion in nine months
The customs office at Birgunj Dry Port, Sirsiya, collected Rs 36.83 billion in revenue over the first nine months of the current fiscal year—61.34% of its annual target.
February saw the highest monthly collection at Rs 4.68 billion. According to Information Officer Yubaraj Bhattarai, the office has recorded steady monthly growth and expects to meet its annual goal.
Social Security Fund enrollment to be mandatory from FY 2082/83
Starting next fiscal year, all workers in Nepal will be required to enroll in the Social Security Fund. Employers must show proof of enrollment during renewal. The policy also includes education and healthcare reforms, such as a “Teacher Bank” and integration of health subsidies into the national insurance framework.
GDP reaches Rs 61 trillion in FY 2081/82 with 4.61% growth, led by energy and trade
Nepal’s GDP is projected to hit Rs 61.07 trillion this fiscal year, growing by 4.61% at consumer prices. Key growth sectors include electricity and gas (13.82%) and transport (9.45%). Agriculture lagged behind non-agricultural sectors. Remittances will account for 25.89% of GDP, with per capita income reaching USD 1,517.
Upper Thulo Khola hydro project nears completion in Magdi
The 22.5 MW Upper Thulo Khola Hydroelectric Project in Raghuganga-7, Magdi, is 90% finished. The dam, powerhouse, and pipeline are complete, with only equipment and transmission work pending. Test production is expected by Baishakh 2082, despite delays in road access to Beni. The project links to a 220 kV national transmission line.
Koshi Summit draws Rs 152 billion domestic investment for 46 projects
The first Koshi Investment Summit secured domestic investment commitments worth Rs 152.26 billion across 46 projects. Notable ventures include solar, urea, and clinker industries, with Barah Cable Car and major hotels like Exis and Royalton among hospitality highlights. Other initiatives span sectors such as EV assembly, agro-processing, cold storage, and hospitals.
Rs 2.3 trillion in hydropower projects stuck as IPO freeze drags on
IPO and rights share approvals for hydropower firms have been frozen for 21 months, blocking Rs 2.3 trillion in investments. The Securities Board blames directives demanding 90% real net worth. Independent producers say halted public funding has stalled 43 projects. Legal ambiguity and leadership gaps have deepened the crisis.
Unfinished government projects raise doubts before new budget
A year after the FY 2081/82 budget, several projects remain unexecuted—including the Gandaki Triangle Project and the PM’s Daughter Self-Reliance Programme. The Finance Ministry cites delays in procurement, indecision, and bureaucratic hurdles. As budget planning for 2082/83 begins, concerns persist over implementation capacity.
Government targets full anti-money laundering compliance within two years
Nepal aims to exit the FATF grey list within two years by fully implementing its anti-money laundering and counter-terrorism financing strategy. FY 2082/83 policies focus on legal reforms, transparency, and e-Governance to improve public service delivery and financial oversight.
Buddha Air founder Basnet launches book ‘By the book’
Birendra Bahadur Basnet, founder of Buddha Air, has released a book titled “By the book”, tracing the airline’s journey from 1997 to now. The book emphasizes ethical business practices and aims to inspire entrepreneurs. The airline has served over 2 million passengers and flies to destinations in Nepal and India.
KMC to train over 2,000 at upcoming skill fair
Kathmandu Metropolitan City will host ‘Skill Fair 2025’ at Tundikhel from May 21, training 2,082 people across 30 trades. The event is part of KMC’s employment and income initiative. Last year, the fair surpassed targets, and by 2026, KMC aims to train 15,000 and help 5,000 find jobs or start businesses.
Himalayan Reinsurance expands reach with 15 global partners
Himalayan Reinsurance now operates in 52 countries through partnerships with 15 international reinsurers, including GIC Re, Hannover Re, and Singapore Re. Approved for the Indian market and managing Nepal’s Foreign Employment Insurance Fund, it reported Rs 2.39 billion in net premium income in Q2. AM Best reaffirmed its B+ rating.
Everest tops EPS among banks; NIC Asia at bottom
As of Chait, Nepal’s commercial banks recorded an average earnings per share (EPS) of Rs 14.27. Everest Bank led with Rs 35.61, while NIC Asia had the lowest at Rs 1.41. Out of 20 banks, half saw EPS growth. Total paid-up capital reached Rs 385.33 billion, with Rs 41.25 billion in cumulative profit.
NRB penalizes banks over compliance issues
Nepal Rastra Bank has penalized several commercial banks, including state-owned ones, for violating rules related to interest payments, loan classification, and governance. NIC Asia, Prabhu, Himalayan, and Nepal Bank faced action, while Standard Chartered was fined Rs 148.5 million. Nepal Bank’s former board chair was fined Rs 500,000.
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