KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape reflects a mix of structural strain and regulatory shifts, with muted capital market activity, rising gold prices, and persistent fiscal and administrative bottlenecks. While NEPSE trading remains subdued amid political uncertainty, gold prices continue to rise, signaling investor preference for safe assets.
Major public programs face financing gaps—most notably the national health insurance scheme, which owes hospitals Rs 14 billion despite growing service demand. Governance challenges are evident across stalled provincial projects, delayed infrastructure contracts, and aggressive recovery of old land revenue arrears, all of which have stirred tensions within the private sector.
At the same time, the government has introduced new frameworks such as the Carbon Trading Regulation 2025 to tap foreign currency opportunities and promote private-sector participation. Grassroots tensions—from locals blocking limestone tippers in Salyan to traders demanding action against business decline in Lahan—highlight growing public frustration with unfulfilled agreements and weak oversight.
Meanwhile, targeted interventions like dairy subsidies in Bhimad, efforts to curb illegal animal product imports in Biratnagar, and diplomatic pushes for Vietnamese investment suggest active attempts to stimulate economic activity, even as administrative, financial, and regulatory inconsistencies continue to constrain broader growth.
NEPSE slips 1.66 points amid muted trading
On Thursday, the last trading day of the week, the Nepal Stock Exchange (NEPSE) index inched down by 1.66 points to close at 2,607. The market showed very little movement throughout the session, fluctuating only between 2,612 and 2,602. Trading activity also remained weak, with turnover falling below Rs 4 billion and settling at Rs 3.49 billion, compared to Rs 3.73 billion the previous day. Analysts attribute the subdued environment to political uncertainty and election-related ambiguity, which have discouraged both buyers and sellers. While share prices rose for 98 companies and declined for 149, all sector indices moved less than one percent. Banking gained 0.15 percent, while life insurance rose 0.18 percent.
Gold price climbs by Rs 1,000 per tola on Thursday
Gold and silver prices rose on Thursday compared to the previous day. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of one tola of gold increased from Rs 252,100 to Rs 253,100—a rise of Rs 1,000. Silver also saw an uptick, reaching Rs 3,805 per tola from Wednesday’s Rs 3,750. On the international market, gold is trading at USD 4,242 per ounce and silver at USD 62 per ounce.
Health insurance program faces Rs 14 billion dues to hospitals
Nepal’s national health insurance program recorded 12.5 million hospital visits last fiscal year, according to Health Insurance Board Executive Director Raghunath Kafle. While the data suggests an average of five visits per beneficiary, only 2.5 million people used the service even once, indicating unequal utilization. Kafle said the number of enrollees seeking services is rising annually, and the Board is working on expanding coverage and amending the Health Insurance Act, 2017. However, experts warn that the scheme is struggling due to delayed payments to hospitals and financial instability: premium collections total only Rs 3.75 billion, compared to Rs 14 billion owed to service providers.
Govt unveils carbon trading regulations for 2025, opens door to private sector
The Government of Nepal has rolled out the Carbon Trading Regulation, 2025, enabling private-sector contributions to carbon-emission reduction to be included in national carbon trading frameworks. The regulation—approved by the Cabinet on December 1 and published in the Nepal Gazette on Tuesday—broadens carbon trade beyond projects previously limited to the Alternative Energy Promotion Centre. According to the Ministry of Forests and Environment, Nepal can now engage in carbon trading through bilateral agreements under Article 6 of the Paris Agreement, competitive markets, or non-market approaches. The new policy’s scope spans hydropower, forestry, agriculture, and alternative energy, potentially turning carbon trade into a significant source of foreign currency earnings for Nepal.
Land revenue offices begin issuing notices to recover old real estate arrears
The real estate sector is experiencing turbulence as Land Revenue Offices have started sending notices to individuals and businesses to recover long-pending arrears identified by the Office of the Auditor General (OAG). The OAG’s 62nd annual report revealed that millions of rupees in capital gains tax and registration fees were under-collected during property transfers in FY 2023/24. Offices such as Lagankhel have already begun demanding repayment, often using a “comparative method” that flags land transactions as undervalued if they fall below the selling price of nearby plots—even if they exceed the government’s minimum valuation. The Nepal Land and Housing Developers’ Federation has opposed this approach, calling it impractical and discouraging for compliant taxpayers.
Nepal’s envoy encourages Vietnamese businesses to invest more in Nepal
Nepal’s Ambassador to Thailand and Vietnam, Dhan Bahadur Oli, has urged Vietnamese investors to expand their investment footprint in Nepal, particularly in export-oriented manufacturing. Speaking in Hanoi during a meeting with the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Vietnam Chamber of Commerce and Industry (VCCI), he highlighted the 50th anniversary of diplomatic ties and stressed the importance of boosting trade and investment. FNCCI President Chandra Prasad Dhakal also encouraged stronger economic collaboration, noting that Nepali handicrafts, tea, coffee, and herbs hold strong potential in the Vietnamese market. Both sides underscored investment opportunities in manufacturing, ICT, pharmaceuticals, tourism infrastructure, cable cars, and resort development.
Bagmati province’s billion-rupee projects stalled or underutilized
The Bagmati Provincial Government is facing scrutiny as numerous multi-million-rupee development projects remain incomplete, in poor condition, or functional only on paper. Of the 12 cold storage projects launched across nine districts in FY 2017/18 at a cost of Rs 1.6 billion, two were never started, one remains unfinished, and only two of the nine completed sites are operational due to disputes over the 70:30 investment modality between provincial, local, and cooperative partners. The Powder Milk Factory in Hetauda—built for Rs 470 million and completed two years ago—also remains nonfunctional due to a lack of an operating model. Similarly, nine view towers and related tourism structures built at a cost of Rs 287.2 million across eight districts remain largely unused, and the building intended for the Provincial Agricultural Wholesale Market is currently being used temporarily by a provincial ministry.
Government cancels contract for Kanchanpur postal highway section
The Hulaki Highway Directorate under the Department of Roads has terminated the contract for the Mohana River–Doke Bazaar–Belauri–Beldangi–Daiji segment of the Postal Highway in Kanchanpur. The contract with Baba Hans–Siddhisai JV, Kathmandu—signed in FY 2016/17—was canceled on Thursday after repeated delays and a complete halt in progress. Although 82 percent of the work had been completed, 5 km of the 20 km section remained unfinished. The contractor’s explanation following a 15-day notice was deemed unsatisfactory. The government will now seize the performance bond, recover the cost of remaining work, and recommend the firm for blacklisting.
Morang administration recovers Rs 60 million and land from loan sharks
The Morang District Administration Office has made notable progress in resolving loan-sharking cases and returning assets to victims. Since the government empowered District Administration Offices to handle such cases, Morang alone has recovered over Rs 60 million and significant landholdings in the past six months. From mid-May to November 16 of FY 2025/26, the office processed 239 of 930 complaints, retrieving Rs 65.5 million and 50,794.31 square meters of land. Despite facing political pressure and threats, the administration continues its work, with an average of two new cases filed each day.
Biratnagar animal quarantine office reaches 83% of quarterly target
The Animal Quarantine Office in Biratnagar has achieved 83.37 percent of its operational target and 47.55 percent financial progress in the first trimester of FY 2025/26. Office Chief Dr. Bidur Prasad Gautam reported that the office intensified monitoring to curb illegal cross-border animal product movement, with strict inspections at the Rani (Biratnagar), Bhantabari (Sunsari), and Madar (Siraha) checkpoints. During 32 monitoring operations, authorities seized and destroyed large quantities of prohibited items, including 240 kg of broiler chicken meat, 329 broiler chickens, 29 crates of white eggs, and 735 kg of frozen fish.
Hetauda proposes turning northern Tribhuvan Highway section into tourism corridor
Hetauda Sub-Metropolitan City has proposed redesignating the northern stretch of the Tribhuvan Highway—from Buddha Chowk northward—as a dedicated tourism route. Local leaders and stakeholders argue that investment in a major national highway is unnecessary, given reduced traffic following the Expressway’s construction and population decline in northern wards. They also recommended reducing the road boundary to 16 meters on each side of the centerline—down from the existing 22.86 meters—to minimize damage to nearby structures and improve cost efficiency. The proposal will be finalized in the Municipal Assembly in Poush.
Gulmi’s paddy output drops by 8 percent
Paddy production in Gulmi district has fallen by 8 percent this year, according to the Agriculture Knowledge Centre. Information Officer Tikaram Nyaupane reported that the district produced 22,323 metric tons of paddy this season, down from 24,426 metric tons last year. Cultivated area also decreased—from 7,288 hectares to 6,270 hectares. The decline is attributed to erratic rainfall, extended drought, migration from rural areas, and shortages of improved seeds and fertilizers. The Centre is promoting the preservation of indigenous rice varieties, which remain popular among farmers due to their taste and quality, even as lower-priced imported rice gains ground.
Fraud concerns rise over German language exam quotas
Nepali students seeking to go to Germany for training are facing increasing difficulties with the mandatory German language examinations, amid allegations of fraud and a lack of transparency. Germany accepts about 500 Nepali trainees each year, and candidates must pass five language levels from A1 to C1. The official exam partner in Kathmandu, Goethe Zentrum, charges Rs 16,500 for a single A1 course, and many students end up spending as much as Rs 1.5 million over two years. A major complaint is that students studying at other institutes struggle to secure exam seats because the limited quota is reportedly dominated by Goethe Zentrum’s own students, forcing others to travel to India or lose significant time and money.
Locals halt limestone tippers on Kapurkot–Koila road over worsening damage
Residents of Salyan have once again blocked the movement of tippers transporting limestone on the Kapurkot–Koila road from Thursday morning, citing severe road deterioration and health concerns. Led by the Milan Bazaar Management Committee and the Milan Bazaar Youth Club, locals say the tippers will remain halted until the road is fully blacktopped. They argue that years of heavy traffic have created excessive dust, deep potholes, and serious environmental and safety risks, especially for children. A previous seven-point agreement signed in fiscal year 2022/23 between cement factories—such as Rolpa Cement and Ghorahi Cement—and local authorities on regular maintenance, dust control, and long-term blacktopping was allegedly never implemented, prompting renewed protests.
Bhimad Municipality announces Rs 10 subsidy per liter for dairy producers
Bhimad Municipality in Tanahun has introduced a production-based incentive, offering dairy farmers a subsidy of Rs 10 per liter. Mayor Dadhi Raj Subedi said the municipality has signed an agreement with Bhimad Agricultural Enterprise Cooperative to distribute the grant. Milk prices have also been set: from August 17 to February 12, 2026, farm-gate milk will cost Rs 110 per liter, wholesale Rs 120, and retail Rs 130. From February 13 onward, prices will rise slightly to Rs 115, Rs 130, and Rs 140 per liter respectively.
Hyatt Hotel to pay minimum salary to employees during reconstruction period
The Hyatt Regency Kathmandu in Boudha has reached an agreement with employee representatives to pay staff the government-mandated minimum basic salary while the hotel undergoes reconstruction. The property has been closed since the September 9 Gen Z protest incident, which caused severe vandalism, arson and looting. Management expects repairs to take at least one year. Under the deal, the hotel will provide minimum wages and contribute to the Social Security Fund during closure. Employees who accept the terms will be rehired once the hotel reopens, while those who decline will face redundancy procedures.
Traders press Chamber candidates to stop business decline in Lahan
During the nomination announcements for the 35th convention of the Lahan District Chamber of Commerce and Industry, traders and consumers confronted the presidential candidates, demanding urgent measures to prevent the ongoing business exodus from the area. They highlighted that four rice mills have already shut down and that trade in goods such as groceries and hardware has shifted to nearby Indian markets like Laukaha and Nepali towns such as Golbazar and Chaparari. The candidates—current Secretary Pradip Gupta and current General Secretary Shyam Gupta—were urged to propose concrete plans to reverse the decline, control smuggling, strengthen trader–bank relations, and improve safety for small businesses.
Comment