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 mixed signals, with financial markets and institutions facing pressure even as the government pushes reform and recovery efforts. The NEPSE index declined amid profit-taking, and commercial banks reported an 18 percent fall in quarterly profits despite strong interest income, reflecting tight liquidity and weak credit demand.
At the policy level, Prime Minister Sushila Karki and Finance Minister Rameshwar Khanal emphasized collaboration with the private sector, higher capital spending, and business recovery, while Industry Minister Anil Kumar Sinha vowed to remove regulatory bottlenecks to revive stalled industrial projects.
However, governance challenges persist—from the Finance Ministry’s controversial approval of Euro-6–noncompliant vehicle imports to CIAA’s renewed probe into Pokhara Airport irregularities and SEBON’s paralysis following bureaucratic disputes. Meanwhile, sectors such as dairy, telecom, and infrastructure show sluggish progress, though initiatives like the Sikta Irrigation Project and startup loans signal ongoing structural investment. Overall, the week reflected a transitional economy balancing reform ambitions against institutional inertia, fiscal strain, and the lingering impact of past disruptions.
NEPSE drops 4.26 points as profit-taking halts last week’s rally
The NEPSE index fell by 4.26 points last week to close at 2,596.12, as investors booked profits following a 3.86 percent surge the previous week. The market fluctuated between 2,650.61 and 2,576.83 points, showing a weekly volatility of 73.78 points. After a strong 30.75-point rise on Sunday, the index declined for two sessions, rebounded mid-week, and fell again on Thursday. Finance led the gainers with a 6.17 percent increase, while hydropower dropped 1.39 percent. Himalayan Bank (Promoter) recorded the highest turnover at Rs 1.66 billion. Weekly turnover rose to Rs 30.50 billion, while market capitalization decreased by Rs 5.78 billion to Rs 4.341 trillion, reversing last week’s Rs 162-billion gain.
Finance ministry allows import of 12,000 vehicles violating Nepal’s Euro-6 pollution standard
Despite the enforcement of the Nepal Vehicle Pollution Standard, 2082 adopting Euro-6 norms, the government has allowed around 12,000 non-compliant vehicles to enter Nepal. Finance Minister Rameshwar Khanal approved the imports, citing business concerns that letters of credit had already been opened. However, environmental experts warn that the decision undermines air-quality goals and public health, especially in cities like Kathmandu.
PM Karki calls for end to remittance dependence
Prime Minister Sushila Karki has said Nepal must move beyond its reliance on remittances and focus on expanding domestic production. Speaking at the National Economic Debate 2.0, she said the government is accelerating capital spending to inject liquidity and create employment. Karki noted that the administration is working closely with Nepal Rastra Bank to stabilize the financial system, remove policy bottlenecks, and prioritize key sectors such as hydropower, tourism, and agriculture. Reflecting on the challenges during the Gen-Z movement, she encouraged entrepreneurs, farmers, and youth to move ahead with confidence.
Minister Sinha vows to clear legal barriers and fast-track stalled industrial projects
Industry, Commerce, and Supplies Minister Anil Kumar Sinha has pledged to prioritize the removal of legal and procedural barriers hindering industrial growth. Speaking at the National Economic Debate in Kathmandu, he directed officials to expedite long-pending industrial files and called for stronger coordination among ministries to ensure smooth implementation. Sinha said stalled projects continue to drag down economic momentum and stressed that the government should facilitate rather than control economic activities. He urged systematic identification and elimination of legal constraints to make the economy more dynamic and decision-making more efficient.
Finance Minister Khanal accelerates cooperation with private sector for recovery and reform
Finance Minister Rameshwar Khanal said the government has launched immediate collaboration with the private sector, recognizing it as a vital partner in national development and job creation. Speaking at FNCCI’s Economic Debate 2.0, he said efforts to revive businesses and improve revenue collection are progressing swiftly. Khanal said consultations with business leaders began the day after the Cabinet took office, leading to the completion of a “Business Recovery Plan” within a week. The ministry, he added, has adopted a system of quick hearings, discussions, decisions, and implementation.
Power short circuit disrupts flights at Tribhuvan International Airport
A sudden electrical short circuit on the runway at Tribhuvan International Airport around 5:25 p.m. on Saturday disrupted all flight operations. Airport sources said heavy rainfall likely caused water to leak into the runway, triggering the fault. Technicians are working to locate and repair the issue, which reportedly occurred in the edge lights along the runway. Several international flights, including Fly Dubai from Dubai, Qatar Airways from Doha, and Korean Air from Seoul, faced landing difficulties. Korean Air diverted to New Delhi, while several domestic flights returned to other airports. The 3,350-meter runway remains unlit as repairs continue, affecting operations of Qatar Airways, Nepal Airlines, Fly Dubai, SpiceJet, Air Arabia, and Batik Air.
Commercial banks’ first-quarter profits fall 18 percent; Citizens Bank reports Rs 2.04 billion loss
Unaudited reports from 20 commercial banks show that combined net profits declined by 18 percent year-on-year in the first quarter of FY 2025/26. Profits totaled Rs 13.14 billion, down from Rs 16.12 billion a year earlier. Fifteen banks reported lower earnings, while Citizens Bank International recorded a loss of Rs 2.04 billion. Global IME Bank led the sector with Rs 1.85 billion in profit, up 22.92 percent, followed by Nabil Bank at Rs 1.75 billion. Only five banks—Global IME, Everest, Rastriya Banijya, Sanima, and NIC Asia—reported growth, with Rastriya Banijya Bank’s profit surging by 295.72 percent.
Governor Paudel calls for new strategies and higher spending to revive economic momentum
Nepal Rastra Bank Governor Bishwo Paudel has called for new policy measures to boost consumer demand and economic activity. Speaking at FNCCI’s Nepal Economic Debate 2.0, he stressed the importance of maintaining the morale of both businesses and citizens. Paudel said rapid technological change is transforming business models and consumer behavior, urging even traditional sectors to adapt. He emphasized that public institutions must increase spending because economic growth cannot rebound when activity slows.
Nepal’s telecom sector stagnates as ISPs expand and telecom firms face financial strain
Nepal’s telecom market has stagnated at around Rs 90 billion over the past five years, down from Rs 92 billion in FY 2076/77, according to the Nepal Telecommunications Authority. Traditional telecom operators, burdened by high regulatory fees and infrastructure costs, lost 16 percent of their market share, while internet service providers (ISPs) expanded by 93 percent, reaching Rs 21.94 billion in FY 2080/81—dominated by WorldLink Communications. Both public and private telecom firms are now facing liquidity constraints and struggling to invest in 5G and service upgrades.
Capital market remains paralyzed for over a month after finance ministry directive
The Securities Board of Nepal (SEBON) has remained inactive for more than six weeks after the Ministry of Finance ordered the suspension of employee welfare and security funds. The directive, issued by Finance Minister Rameshwar Khanal shortly after taking office, sparked protests among SEBON employees, who said the move violated their statutory rights and the board’s autonomy. The shutdown has stalled approvals for IPOs, rights issues, and bonds worth an estimated Rs 15–20 billion. Experts warn the prolonged disruption is restricting investment, slowing economic growth, and threatening regulatory independence.
DDC yet to clear Rs 500 million in farmer dues as flush milk season begins
The Dairy Development Corporation (DDC) still owes around Rs 500 million to milk-producing farmers as the flush season begins. Agriculture Ministry official Mahananda Joshi said the DDC recently paid Rs 300 million and aims to clear 80 percent of the remaining dues within three to four months. Farmers have faced chronic payment delays from both private dairies and the DDC—last year, private firms owed Rs 2 billion and the DDC Rs 900 million. Oversupply, declining winter demand, and unsold stocks of skimmed milk powder and butter have worsened the situation. Joshi said the risk of non-payment is lower this year, while entrepreneurs emphasized the need for better technology and payment systems to ensure long-term stability in the dairy sector.
Sikta Irrigation Project reaches 50 percent completion after two decades, transforming Banke agriculture
The national pride Sikta Irrigation Project in Banke district has reached 50 percent completion—two decades after construction began. Project Director Raju Acharya said expansion of project scope and rising costs caused delays, but remaining canal works are now progressing rapidly. The western main canal’s 45 kilometers and 37 kilometers of the eastern canal are complete, while key structures and branch networks are under construction. The Duduwa Irrigation System has also resumed and will irrigate 16,000 hectares once finished.
Commercial banks collect over Rs 50 billion in interest in just three months
Nepal’s 20 commercial banks earned over Rs 50.07 billion in interest income from borrowers during the first quarter of FY 2082/83—a 5.25 percent rise compared to the same period last year. While six banks reported lower interest income, 14 saw growth. Global IME Bank led the list with Rs 4.13 billion, followed by Nabil Bank (Rs 3.90 billion), Nepal Investment Mega Bank (Rs 3.24 billion), and Rastriya Banijya Bank (Rs 2.92 billion). Smaller contributors included Machhapuchchhre Bank (Rs 1.46 billion) and Nepal SBI Bank (Rs 1.32 billion), reflecting the sector’s overall robust lending performance.
Study committee recommends cargo operations to boost business at Gautam Buddha International Airport
Despite significant investment, Gautam Buddha International Airport has yet to attract regular international flights. A high-level government committee, chaired by Minister Anil Kumar Sinha, has recommended introducing cargo operations to make better use of the facility. The report notes that Nepalese exporters currently rely on Tribhuvan International Airport, where cargo bookings often face delays. By offering lease-based facilities and simplified licensing, Gautam Buddha International Airport could attract private operators to run efficient cargo flights.
Government invites startup loan applications
The Industrial Enterprise Development Institute has opened applications for the FY 2082/83 startup loan program, allowing entrepreneurs to submit proposals by Mangsir 11—within 17 days of the announcement. Under the Startup Enterprise Loan Operating Procedure, 2082 (First Amendment), eligible startups can apply for loans ranging from Rs 5 million to Rs 20 million. This year, the government plans to support 400 entrepreneurs, down from 600 last year. Eligible applicants include private firms, partnerships, companies, and cooperatives with innovative, technology-based business ideas, registered within the last 10 years and with annual turnover below Rs 150 million.
CIAA launches fresh investigation into Pokhara International Airport construction
The Commission for the Investigation of Abuse of Authority (CIAA) has reopened a probe into the construction and cost escalation of Pokhara International Airport, built by China CAMC Engineering Company. The new investigation targets original decision-makers, including former Civil Aviation Directors Ratish Chandra Lal Suman, Suman Kumar Shrestha, and Triratna Manandhar, as well as political leaders and board members previously spared from accountability. The CIAA is reviewing key contracts, cost revisions, and tender evaluations dating back to 2014. Earlier parliamentary reports had excluded many responsible officials, prompting the anti-graft body to expand its investigation.
Chandragiri Cable Car reopens after two months
The Chandragiri Cable Car resumed operations on Saturday after nearly two months of closure due to damage caused during the Gen Z protests on September 8 and 9. The vandalism had affected the control systems, gondola parking, ticketing areas, and restaurants. With technical assistance from Austrian manufacturer Doppelmayr, Chandragiri Hills completed repairs, safety inspections, and system testing over 40–60 days. Both the cable car and resort reopened to large crowds, with visitors expressing excitement over the restored facilities. Company officials assured that all safety standards are fully met and normal operations have resumed.
FNCCI president urges strong government backing to restore private-sector confidence
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Chandra Prasad Dhakal has urged the government to take special measures to rebuild confidence in the private sector, which contributes about 81 percent to Nepal’s economy. Speaking at the National Macroeconomic Debate 2.0, he called for a formal government acknowledgment of the sector’s contribution through a proposal of public importance. Dhakal said the private sector is still recovering from the Gen Z movement’s destruction, which caused Rs 48 billion in physical damage and Rs 88 billion in total losses.
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