KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic landscape presents a mixed picture of ambition, market momentum, and structural inefficiencies. A notable uptick in stock market turnover—the highest in over three months—reflects renewed investor confidence, further bolstered by a significant surge in gold prices.
However, this financial optimism contrasts sharply with persistent delays in infrastructure delivery, as seen in underperforming projects like the Postal Highway and Rahughat Hydropower. While the government emphasizes future-oriented initiatives such as 5G expansion and tunnel development, actual budget allocations and execution capacity remain questionable.
Regulatory shifts, like the softened penalties for manpower agencies and revisions to hydropower agreements, indicate a political tendency toward appeasement over enforcement. Simultaneously, sluggish disbursement of startup loans and limited uptake in industrial land schemes underscore the disconnect between policy design and private sector responsiveness.
Amidst this, localized success stories—like Jumla’s farmers benefiting from indigenous crop commercialization—showcase the transformative potential of targeted grassroots initiatives when linked to cooperative and market structures.
Stock market records highest turnover in more than three months
Nepal’s stock market saw its largest turnover in over 100 days. On the final trading day of the week, total transactions reached NPR 12.51 billion—just short of the NPR 12.94 billion recorded on March 4, 2025, 101 days ago. According to NEPSE, transactions involving listed companies alone totaled NPR 12.06 billion, with 25.77 million shares exchanged.
Gold price jumps by NPR 4,200 in a day
Gold prices in Nepal surged by NPR 4,200 per tola on Friday, with hallmark gold reaching NPR 197,100. The Federation of Nepal Gold and Silver Dealers’ Associations also reported that silver prices rose by NPR 15 to NPR 2,165 per tola.
Govt prioritizes tunnels and overpasses in fiscal year 2025/26
The government has outlined plans to emphasize tunnel roads, expressways, and overpasses in its policy for the 2025/26 fiscal year. However, the budget for tunnel construction has been reduced by 17% compared to the current year. The Ministry of Physical Infrastructure and Transport has allocated NPR 695.3 million for tunnel projects.
Parliament softens penalties on ‘free visa’ scams by manpower firms
Parliament has taken a lenient stance on penalties for manpower agencies that charge fees for jobs labeled as “free visa.” Subject committees of both the House of Representatives and the National Assembly have proposed reducing fines from those originally stated in the amendment bill. The changes come as part of a broader revision to the Foreign Employment Act, 2064, through a new amendment package.
Finance Ministry yields on disputed ‘take and pay’ provision in power deals
The Ministry of Finance has agreed to revise the controversial ‘take and pay’ provision in hydropower purchase agreements. After pressure from energy developers and the Ministry of Energy, the ministry softened its stance. Point 227 of the new budget specifies that electricity purchase agreements will aim to balance supply and demand. It explicitly states that “take and pay” terms will apply to run-of-the-river projects.
New Cyber–security Bill aims to replace controversial electronic transactions act
The government has introduced a new Information Technology and Cyber Security Bill in Parliament, which would repeal the widely criticized Electronic Transactions Act. The previous law, particularly Section 47, had drawn criticism for its misuse against freedom of expression on social media. The Ministry of Communication and Information Technology has proposed the new legislation to address those concerns.
Industrial land policy falters as private sector interest wanes
A government initiative to boost industrial infrastructure has struggled due to a lack of investor interest. Despite earlier complaints about high land prices, the private sector has shown limited enthusiasm even after land rates were reduced. As a result, officials believe previous demands may have been driven more by the desire for cheaper land than genuine development interest.
Insurance claims increasingly subject to inflated demands and bargaining
Negotiations over insurance payouts have become more contentious in Nepal, with policyholders often demanding double or triple the actual value of their claims. This bargaining approach has made the claims process more complicated and time-consuming. For example, a claimant due NPR 10 million might initially demand NPR 20 million, anticipating negotiations will bring the payout down to the desired amount.
NPR 480 million allocated for municipal road construction
The Ministry of Industry has earmarked NPR 480 million in the new budget to build roads at the local level. Of the 16 approved projects, seven are located in Baitadi district, totaling NPR 210 million.
Ncell estimates NPR 46 billion needed for nationwide 5G rollout
Ncell has stated that it would require at least NPR 46 billion to implement a nationwide 5G network. This estimate was revealed during its program “Building Sustainability: Digital Tomorrow.” The statement comes after the government included nationwide 5G expansion in the new budget.
Habib Bank restarts exit process from Himalayan Bank ownership
Pakistani financial institution Habib Bank has resumed its effort to divest from Himalayan Bank. Although the exit process had been delayed due to regulatory hurdles, the bank has now formally requested permission to sell its founder shares. In response, Himalayan Bank has initiated steps to begin the sale. Habib Bank currently holds over 28 million units of founder shares in the institution.
Only 78 startup entrepreneurs receive loans this fiscal year
Despite selecting 661 applicants, only 78 entrepreneurs have received startup loans so far, totaling NPR 82.5 million. According to the Industrial Enterprise Development Institute (IEDI), 97 individuals have opened accounts to claim the loans. The institute had received over 5,000 proposals and aims to complete loan disbursement by the end of Asar.
Gandaki Province spends less than half its budget by late Jestha
By the second week of June, Gandaki Province had spent only 46.7% of its annual budget for fiscal year 2024/25. The Province Account Controller’s Office cited delays in implementing development projects, with only NPR 15.4 billion spent so far.
Postal Highway project lags behind with less than 50% progress
A section of the Postal Highway in Dang’s Deukhuri region remains incomplete after more than five years. The 20 km stretch from Banghusri to Gadhwa, contracted in Kartik 2076 to Bajraguru Kanchharam JV, shows only 45% physical and 40% financial progress, well behind its original three-year deadline.
Lumbini Province’s 109 local levels to receive NPR 52.77 billion
The federal government has allocated NPR 52.77 billion to 109 local units in Lumbini Province for the upcoming fiscal year. The funds include equalization, conditional, supplementary, and special grants. Rupandehi district will receive the largest share, while Rukum East gets the smallest.
Rahughat Hydropower Project misses second extended deadline
The 40 MW Rahughat Hydropower Project in Myagdi has failed to meet its extended deadline. The project, overseen by NEA’s Raghuganga Hydropower, was contracted to India’s Jaiprakash Associates in 2017 with an initial 45-month timeline. The second extension ends on June 27, 2025, but the project remains incomplete.
IPO opens for Him Star Urja targeting migrant workers and locals
Him Star Urja Company has opened its initial public offering (IPO) for project-affected locals and Nepalis working abroad. The company plans to issue 30% of its NPR 373 million capital, including 186,500 units for locals and 93,250 units for overseas workers, before opening to the general public.
Om Hospital ordered to pay NPR 5.68 million for medical negligence
Chabahil-based Om Hospital has been ordered by the Consumer Court to compensate NPR 5.68 million for negligence in the treatment of Harihar Prasad Gautam. The ruling held both the hospital and two doctors accountable for the damages.
Jumla farmers earn income from indigenous crops
Farmers in Jumla are now financially self-reliant as traditional crops find a market. Previously stored without income, these goods are now being sold for cash through Chandannath Cooperative, which began exchanging crops for rupees in 2017 and marketing them under branded packaging in a local mini market.
Comment