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 infrastructure developments paint a mixed picture of progress and persistent challenges. The stock market showed strong momentum with broad-based gains and rising turnover, while Kumari Bank’s dramatic profit growth signals financial sector resilience.
At the macro level, Nepal Rastra Bank’s rising foreign investment earnings contrast sharply with mounting public debt and a significant annual loan repayment burden. Infrastructure projects such as the Tanahun and Budhi Gandaki hydropower developments are progressing, though others like Sunkoshi-Marin face delays.
Meanwhile, issues like insider trading, electricity loss in Karnali, and rising cases of migrant worker exploitation highlight governance and structural gaps. Regulatory actions—from SEBON’s exploration of global listing mechanisms to the Insurance Authority’s engagement with the hydropower sector—reflect efforts to address long-standing inefficiencies.
Social initiatives, including subsidized markets and food quality enforcement, show attempts to support consumers, while the reopening of the Kailash–Mansarovar route points to a tourism revival. Overall, Nepal is balancing economic optimism with institutional and developmental hurdles that require sustained reform.
All indices climb as NEPSE gains over 18 points
On Thursday, the final trading session of the week, all indices on the Nepal Stock Exchange (NEPSE) posted gains. The NEPSE index rose by 18.30 points from the previous day, closing at 2,850. The market remained bullish throughout the session, peaking at 2,861 around 2:04 PM. However, a mild wave of profit-taking near the end slightly pulled the index back. A total of 187 companies saw an uptick in their stock prices, while 62 recorded losses. Trading volume reached Rs 8.53 billion, up from Rs 7.63 billion the previous day.
Gold prices steady, silver sees slight rise in local market
Gold prices remained unchanged in the Nepali market on Thursday, while silver experienced a slight uptick. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of hallmark gold stayed at Rs 198,400 per tola (11.66 grams) on both Wednesday and Thursday. In contrast, silver prices rose by Rs 10.
NRB earns Rs 90 billion from foreign reserves investments
Nepal Rastra Bank reported earnings of Rs 90 billion from its foreign currency investments in the 2024/25 fiscal year—a significant rise from Rs 78.16 billion the previous year. The increase is largely attributed to record levels of foreign exchange reserves during the period.
Public debt projected to hit Rs 2.94 trillion by fiscal year-end
Nepal’s public debt is expected to climb to Rs 2.942 trillion by the close of the current fiscal year. Data from the Public Debt Management Office shows that by mid-July 2026, domestic borrowing will represent 46.85% of this total, with external loans comprising 53.15%. Within domestic instruments, development bonds will account for 33.98%, treasury bills 12.2%, citizen saving certificates 0.49%, foreign employment saving certificates 0.04%, and IMF bonds 0.13%.
Government spends Rs 362.59 billion annually on loan repayments
In the last fiscal year (2024/25), the government paid approximately Rs 362.59 billion to service both domestic and foreign debt, including interest and principal payments. With rising obligations, pressure on public finances has intensified—especially after the World Bank doubled its lending rates, affecting Nepal’s borrowing costs.
Current loan rule risks letting major shareholders dodge liabilities
Nepal Rastra Bank (NRB) currently allows a 70% loan-to-value (LTV) ratio on loans backed by shares, based on the average share price over the past 180 days. For instance, if a company’s stock is valued at Rs 1,000 and a promoter who originally invested Rs 10 million in 100,000 shares now holds Rs 100 million worth of shares, they can secure a loan of up to Rs 70 million under this provision. Critics argue this opens loopholes for large shareholders to offload liabilities.
Insurance regulator engages IPPAN and reinsurers over hydropower issues
The Nepal Insurance Authority met with representatives from the Independent Power Producers’ Association Nepal (IPPAN), Nepal Insurers’ Association, and reinsurance companies on Thursday to discuss challenges in insuring hydropower projects. The discussion aimed at identifying bottlenecks and seeking actionable solutions to long-standing problems in the sector.
Asset Management Company becomes public limited firm
The Asset Management Company has officially transitioned into a public limited company following a special general meeting held on May 5, 2025, which also approved a capital increase. The Office of the Company Registrar has finalized the conversion. The firm is chaired by former banker and ex-Insurance Board chair Devendra Pratap Shah, with Ramesh Kumar Bhattarai as managing director.
SEBON to assess feasibility of global depository receipts
The Securities Board of Nepal (SEBON) is now exploring the issuance of Global Depository Receipts (GDRs) as a means for Nepali companies to list on international stock exchanges. This comes after earlier efforts to directly list on foreign exchanges failed to gain traction.
Insider trading widespread ahead of key financial disclosures
Insider trading remains a pressing issue, with sensitive information such as financial results, dividend plans, and bonus issues leaking into the market before official announcements. A select group of traders takes advantage of these leaks to buy early and exit with quick profits of 15–20 percent. Sources of the leaks often trace back to company management or board members. Although the law bars insiders from trading for a year post-resignation, many circumvent this by using relatives’ names.
Subsidized festive markets to open mid-September
The government is preparing to launch subsidized shops for the upcoming festivals starting in mid-September. Managed by the Food Management and Trading Company and Salt Trading Corporation under the Ministry of Industry, the initiative is backed by Rs 40 million in funding, with Rs 38.699 million earmarked for running these markets across the country.
Nepal Telecom issues warning over SIM card overpricing
Nepal Telecom has fixed the price of prepaid SIM cards at NPR 90 and issued a warning against vendors charging more. The company urged customers to report any overpricing to local Telecom offices, police, or administration authorities. Legal action will be taken against violators as part of efforts to ensure fair access to telecom services.
Low-quality lentils from India returned
The Department of Food Technology and Quality Control has rejected and returned a shipment of substandard lentils imported from India by New Shree Betal Traders in Kanchanpur. The consignment included 2,920 kg of red lentils and 2,250 kg of black gram, which failed to meet quality standards.
Lumpy skin disease hits over 26,000 cattle in 25 districts
An outbreak of lumpy skin disease has affected 26,632 cattle and caused 816 deaths across 25 districts, according to the Department of Livestock Services. Financial losses have reached an estimated Rs 1.3 billion, with Koshi Province accounting for Rs 1.01 billion in damages. The disease has also been reported in Bagmati, Lumbini, Madhesh, Karnali, and Gandaki provinces.
Investment secured for 341MW Budhi Gandaki hydropower project
The 341MW Budhi Gandaki semi-reservoir project—the largest private-sector hydropower initiative in Nepal—has secured financial backing. Nepal Investment Mega Bank is leading a group of 10 investors, including 8 commercial banks, Nepal Infrastructure Bank, and the Hydroelectricity Investment and Development Company. Promoter Sahas Urja has confirmed additional individual investors will participate.
Major delays in Sunkoshi-Marin dam construction
While tunnel construction for the Sunkoshi-Marin Diversion Multipurpose Project was completed 15 months ago, work on the dam has been significantly delayed. Officials attribute the setback to poor performance and inaction by the construction contractor, hampering overall progress on the project.
Karnali Province releases new budget implementation guidelines
To promote transparency and accountability in public spending, Karnali Province has issued new guidelines outlining conditions and installment procedures for grants distributed to local governments during the fiscal year 2025/26. The Ministry of Economic Affairs and Planning sent a 27-point directive to the chief administrative officers of all 79 local units across the province.
73,000 cubic meters of concrete poured in Tanahun hydropower dam
Construction of the main dam for the 140MW Tanahun Hydropower Project, located in Rishing Rural Municipality-1 of Tanahun, has so far used 73,000 cubic meters of concrete. The project’s total concrete requirement stands at around 900,000 cubic meters. Work officially began on March 20, 2025. As part of Package-1 of the project, water from the Seti River is being rerouted through Vyas Municipality-5 and Rishing Rural Municipality-1 to facilitate dam construction.
Karnali Province reports highest electricity loss despite low access
Despite having the lowest electrification rate in the country, Karnali Province recorded the highest electricity loss—21.74 percent—last fiscal year, according to the Nepal Electricity Authority. This figure reflects the difference between electricity generated and the amount billed to customers. The high loss rate is mainly attributed to aging infrastructure, interference from trees, extended distribution lines, and electricity theft.
Rising migrant worker fraud and injuries reported in Baglung
The Migrant Resource Center in Baglung has reported an increase in incidents involving migrant workers facing fraud, injuries, deaths, and even imprisonment. According to the center’s head, Min Upadhyay, 15 formal complaints have been filed so far, including issues related to withheld passports, unauthorized job changes, and wage disputes. Of these, 10 cases have been resolved, and approximately Rs 2.13 million in compensation has been distributed with support from the Department of Consular Services and the District Administration Office.
Kumari Bank’s annual profit exceeds Rs 2 billion
Kumari Bank has posted a net profit of Rs 2.11 billion for the fiscal year 2024/25, marking a dramatic improvement over the previous year’s profit of just Rs 4.6 million. The massive profit jump is mainly due to a significant reduction in impairment losses. Additionally, the bank experienced moderate growth in earnings from its core banking operations.
Kailash–Mansarovar route reopens with surge in Indian pilgrims
The Kailash–Mansarovar pilgrimage route through Humla has reopened, leading to a significant influx of Indian pilgrims. On Wednesday alone, 13 flights arrived at Simikot Airport, with daily flights ranging between 5 and 82. Five helicopters are on standby to accommodate the rising demand. Since mid-April, nearly 3,000 Indian pilgrims have traveled to Mansarovar, with hotel bookings confirmed through September. According to the Humla District Police Office, 2,998 pilgrims have already completed their journey.
Comment