KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic and policy developments reflect a mix of market volatility, ambitious government spending, and implementation gaps. The NEPSE index dropped sharply by over 35 points amid declining investor confidence and lower trading volumes, even as certain sectors like hotels showed optimism post-budget due to targeted tax exemptions.
The government has significantly ramped up budget allocations for anti-poverty programs and MCC implementation, but long-stalled projects like the Surkhet Medical College continue to highlight persistent issues in execution.
While gold prices surged, indicating possible investor shifts, EV importers face financial stress due to speculative pre-budget decisions. Simultaneously, despite government support, agriculture in regions like Koshi still leans heavily on imported seeds, underlining trust and quality concerns.
The heavy reliance of insurance firms on fixed deposits, rising imports through Birgunj, and federal grant disparities further illustrate structural challenges and uneven resource distribution in Nepal’s economy.
NEPSE index drops by 35 points as market sees widespread decline
The Nepal Stock Exchange (NEPSE) index fell by 35.07 points on Tuesday, closing at 2,659.59. This comes after Monday’s 1.60% rise and a 17.44-point gain recorded last Wednesday. The total trading volume reached Rs 6.67 billion, a noticeable drop from Monday’s Rs 8.87 billion, indicating reduced investor activity.
While the share prices of 34 companies rose, a significant 214 saw declines. Shares of Om Megashree and Pure Energy hit the upper circuit limit, but most sector indices ended the day lower.
Gold price rises by NPR 2,900 per tola on Tuesday
Gold prices surged by NPR 2,900 per tola on Tuesday, with the Federation of Nepal Gold and Silver Traders Association setting the rate at NPR 192,700. On Monday, gold was priced at NPR 189,800 per tola. Silver also saw an increase of NPR 55 per tola, climbing from NPR 1,990 to NPR 2,045.
Govt allocates Rs 16.92 million for anti-poverty programs in FY 2025/26
For the 2025/26 fiscal year, the government has budgeted Rs 16.92 million for programs targeting poverty, including distributing identity cards to poor households. This is a significant increase compared to Rs 0.83 million spent in 2023/24 and the Rs 2.59 million estimated for 2024/25—making the new budget over six times higher than the current year’s allocation.
Govt sets aside Rs 846 million for MCC project in upcoming fiscal year
The government has earmarked Rs 846 million for the Millennium Challenge Corporation (MCC) project under the Millennium Challenge Account Nepal for the 2025/26 fiscal year. Of this, Rs 277 million will come from government funds, and Rs 568 million will be provided through foreign grants. Though the project had been put on hold by the US during the Trump administration, Nepal has now decided to move ahead with it independently.
Parliament begins debate on amendment to allow bankers to run businesses
The Finance Committee of Parliament has started discussions on a proposed amendment to the Bank and Financial Institutions Act (BAFIA), which would permit individuals to operate both banks and businesses simultaneously. The idea, long debated, remains contentious. During Monday’s meeting, lawmakers examined the proposal’s implications and decided to consult Nepal Rastra Bank for its official stance before proceeding further.
Nepal Rastra Bank reshuffles top executives
Nepal Rastra Bank has implemented changes among its executive directors. As per Assistant Information Officer Dr. Bhagwat Acharya, Governor Biswo Paudel reassigned two executive directors and appointed a new one. Newly promoted executive director Dirgha Rawal will now lead the Bank and Financial Institutions Supervision Department. Meanwhile, former department head Ramu Paudel has been moved to the Currency Management Department.
Govt disburses over Rs 14.82 billion through social security scheme
Since its launch six and a half years ago, the Contribution-Based Social Security Scheme has paid out more than Rs 14.82 billion in benefits. According to the Social Security Fund (SSF), a total of Rs 81.19 billion has been collected under the scheme, with 15% disbursed to workers and their families as claims under four separate programs. These figures cover the period from Shrawan 2076 to Jestha 16, 2082.
EV importers face financial pressure due to budget-related rumors
Rumors of possible tax hikes in the upcoming budget prompted electric vehicle (EV) importers to secure large loans to stock up on vehicles, leading to financial stress. In the two weeks before the budget was announced, 4,689 EVs worth Rs 2.34 billion were brought into Nepal. Importers now face mounting interest payments, as many of these vehicles take between three to six months to sell.
Insurance firms primarily invest in fixed deposits
Nepal’s insurance companies are heavily invested in fixed deposits, with roughly 80% of their assets—both life and non-life—parked in bank accounts. Data from the Nepal Insurance Authority shows that between fiscal years 2019/20 and 2023/24, these firms have made limited efforts to diversify their investment portfolios.
Goods worth Rs 506.67 billion imported through Birgunj border in 10 months
In the first 10 months of the current fiscal year, imports worth Rs 506.67 billion entered Nepal via the Birgunj customs point. This marks a 12.75% increase compared to the same period in FY 2080/81, with an additional Rs 57.3 billion in imports recorded this year.
KMC and Karnali Province to receive highest federal grants next fiscal year
Kathmandu Metropolitan City (KMC) and Karnali Province will receive the highest federal grants in the fiscal year 2082/83. As per a financial transfer report released by the Ministry of Finance on Monday, Kathmandu will receive Rs 2.34 billion through a mix of equalization, conditional, special, and supplementary grants. On the other hand, Narpa Bhumi Rural Municipality in Manang will get the smallest allocation—Rs 129.8 million.
Kanti Highway to remain closed for four days starting Wednesday
The Kanti Highway Project has announced a four-day road closure from Wednesday to Saturday to facilitate the installation of a Bailey bridge over the Bagmati River near Baguwa. According to the project office, vehicular traffic will be completely halted from Jestha 21 to 24 for the construction work.
Hotel and export sectors upbeat about budget for FY 2025/26
While not all demands were met, stakeholders from the hotel and export sectors have responded positively to the newly announced budget for fiscal year 2025/26. Binayak Shah, president of Hotel Association Nepal (HAN), said the budget has raised hopes among hotel operators but emphasized the need for strong implementation.
Stock market shows mixed reaction after budget speech
The stock market responded with mixed results following Monday’s budget announcement. Banking and hydropower stocks declined, while hotel and investment sectors rose by over 2% in the NEPSE index. Investors are encouraged by new budget provisions offering tax exemptions to the hotel and resort sectors, as announced by Finance Minister Bishnu Paudel.
Sri Lankan and Thai tourist numbers rise in Lumbini
Lumbini has seen a growing number of tourists from Sri Lanka and Thailand. Between January and May, 12,841 Sri Lankan and 12,068 Thai nationals visited the site. Sri Lanka ranks first and Thailand second in tourist arrivals, with most entering Nepal through the Belahiya border point.
No progress on Surkhet medical college despite 9 years of funding
Although the government has allocated funds for Surkhet Medical College for nine consecutive years, the project remains stalled. In the latest 2025/26 budget, Deputy Prime Minister and Finance Minister Bishnu Paudel reaffirmed plans to develop infrastructure for Surkhet and three other medical colleges. Despite this, the project is still stuck at the detailed project report (DPR) phase. A total of Rs 560 million has been earmarked for the initiative.
Organic farm manure to be distributed to Jumla farmers
To promote local agriculture and reduce reliance on chemical inputs, the Agriculture Development Office in Jumla plans to distribute organic farm manure to local farmers. Jumla was declared an organic district in 2007 (BS 2064), and the use of pesticides like Butachlor is banned, though some unauthorized usage has been observed.
Trade Tower IPO receives seven times more applications than expected
Trade Tower’s IPO attracted over seven times more applications than anticipated. According to CDS and Clearing, 1,961,391 applicants collectively requested 23.36 million shares, while only 3.29 million shares were made available for public subscription. Although the initial notice listed Monday as the final application day, the deadline was extended to Tuesday due to Sunday being a public holiday.
Manjushree Finance and NCHL sign agreement on NPS-NS and domestic card scheme
Manjushree Finance and Nepal Clearing House Limited (NCHL) have signed an agreement for principal membership under the NPS-NS and the Nepal Pay Card scheme. The agreement was signed by Deputy CEO Padam Thakulla on behalf of Manjushree Finance and CEO Nilesh Man Singh Pradhan on behalf of NCHL.
Despite govt support, farmers in Koshi still prefer imported rice seeds
The Koshi Province Government has been supporting 38 institutions involved in seed production at public, private, and community levels to reduce reliance on imported rice seeds. However, farmers remain hesitant to adopt domestically produced seeds.
Acting Director of the Agriculture Development Directorate, Prakash Kumar Dangi, said that Koshi cultivates rice on 276,386.72 hectares and requires 18,819.34 metric tons of seed annually. Only 40% of this demand is met through local production, 5% through traditional saved seeds, and the rest is imported—mostly from India and other countries.
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