KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The aftermath of the Gen Z protests has exposed Nepal’s deep-rooted governance and economic vulnerabilities, prompting urgent calls from key sectors for stability, reform, and inclusive recovery. While the formation of an interim government under Sushila Karki has brought a measure of calm and optimism, major economic pillars—ranging from banking and commerce to tourism and cross-border trade—have suffered heavy losses, with over Rs 10 billion in insurance claims and disrupted public services.
The private sector, responsible for the majority of GDP, employment, and government revenue, has emerged as both victim and potential driver of recovery, with the FNCCI emphasizing the need for government-private sector collaboration and long-term policy reform.
Meanwhile, renewed confidence in institutions, investor protection, and infrastructure security will be critical to rebuilding trust and sustaining momentum toward democratic renewal and economic resilience.
FNCCI calls for security and cooperation after Gen Z protests
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government to ensure a secure and stable environment for business operations, stressing that private sector-led growth is key to national recovery.
In a statement following the Gen Z protests, which resulted in significant damage to private and public infrastructure, FNCCI condemned the violence and called for immediate measures to prevent such incidents in the future. It noted that the rebuilding process will heavily rely on private sector resources and investment confidence must be restored.
FNCCI acknowledged youth concerns about corruption, governance, employment, and revenue mobilization, and expressed its readiness to collaborate with stakeholders to steer Nepal toward inclusive and sustainable growth. The Federation emphasized that the private sector contributes 81% of GDP, 80% of government revenue, and 86% of employment—making it central to the country’s future.
FNCCI president urges resilience amid business losses
The President of the FNCCI has called on entrepreneurs to remain united and focus on rebuilding after the widespread destruction caused during the Gen Z protests on Bhadra 23–24 (September 8–9). He reflected on his own business journey—starting with no seed capital and now employing over 20,000 Nepalis—emphasizing that despite the billions in losses, the private sector must lead the path to recovery.
He urged business leaders to view the crisis as a turning point—to reinvest, create jobs, and renew hope. Stressing the private sector’s contribution to over 80% of GDP and 86% of jobs, he said: “The fire may burn bricks and wood, but it cannot destroy our determination. We must rise again to build a stronger Nepal.”
Gen Z protests leave lasting impact on tourism sector
The Gen Z demonstrations of Bhadra 23–24 have left a deep mark on Nepal’s tourism industry, just as the high season was set to begin. Demonstrators targeted core state institutions—the executive, legislature, judiciary—as well as media outlets and private property. Hospitals continue to treat scores of injured protestors.
The tourism sector, which plays a central role in Nepal’s economy and global image, suffered substantial losses. Damage to tourist infrastructure and cancellations of hotel bookings were reported, with the Hilton Kathmandu alone suffering losses exceeding Rs 8 billion. Total losses in the hotel sector are estimated at over Rs 25 billion.
Despite the setback, tourism experts remain optimistic. Former Finance Secretary Rameshore Khanal said Nepal has a proven record of bouncing back from crises like the 2015 earthquake and COVID-19. NTB CEO Deepak Raj Joshi, economist Sameer Khatiwada, and Hotel Association President Binayak Shah shared similar sentiments, calling for coordinated recovery efforts.
Normalcy returns across Nepal following new government formation
Life is gradually returning to normal throughout Nepal after the appointment of former Chief Justice Sushila Karki as the head of the interim government. The curfews and prohibitory orders enforced in response to the Gen Z protests have now been lifted in various parts of the country. Daily life is resuming, businesses are reopening, and there is a renewed sense of optimism—especially among young people.
The law and order situation has begun to stabilize, ending weeks of civil unrest. The new administration has pledged to meet the demands of the younger generation, which include a stronger focus on anti-corruption and good governance.
The interim government has been tasked with conducting national elections by the scheduled date and ensuring a smooth democratic transition. With a focus on accountability and restoring order, the government aims to fulfill public expectations and lay the foundation for democratic renewal.
Public transport resumes in Kathmandu as curfew ends
Public transportation services in the Kathmandu Valley resumed Saturday morning after being suspended since Tuesday due to the Gen Z protests. According to Superintendent of Police Deepak Giri, spokesperson for the Valley Traffic Police, services are gradually returning to normal.
While only a few vehicles were seen on Friday, traffic volume and commuter activity increased noticeably on Saturday. Buses from Chitwan to Kathmandu have resumed operations, with more routes expected to reopen later in the day. The Nepal Army’s curfew and restrictions, in place earlier this week, were officially lifted today.
Tourism bodies appeal for peace
Tourism bodies including PATA Nepal, TAAN, and the Nepal Mountaineering Association have jointly appealed for peace, political stability, and tourism-friendly policies to restore visitor confidence. With established international networks and access to regional markets like India and China, industry leaders believe Nepal’s tourism will recover swiftly.
Finance Ministry reports major service disruptions after protests
The Ministry of Finance has reported significant disruptions to government services following widespread vandalism during the recent Gen Z protests. Offices including the Finance Ministry, Customs, Tax Offices, and the District Treasury Controller were damaged, limiting many to only basic operations.
Finance Ministry spokesperson Tanka Prasad Pandey confirmed severe damage to parts of the Budget Division, although three key software systems and their data remain secure. A total of 25 government vehicles were destroyed, 20 partially damaged, and 40 motorcycles were set on fire.
Some services have resumed—customs operations are partially functional using the ASYCUDA system, while the Inland Revenue Department is operating online only. However, many tax offices across the country remain out of service.
Government accounting platforms such as SUTRA, TSA, and CGAS are still offline, pending directives from the new administration. Only the Revenue Management Information System (RMIS) is currently active.
Jamunaha border partially reopens following Gen Z protests
The Jamunaha border crossing between Nepal and India, closed earlier due to the Gen Z protests, has been partially reopened by Indian authorities as the security situation stabilizes. The border—located in Banke district—was sealed after violent incidents, including arson and vandalism, in Nepalgunj and surrounding areas.
Ramesh Singh Rawat, chief of the Rupaidiha Police Station, said that controlled movement resumed on Friday, although stringent identity verification continues. Previously, only emergency vehicles and patients were allowed to cross.
On the Nepali side, Armed Police Force and Army personnel have been deployed to maintain security. The Nepali Army assumed control of the border on Thursday, following the torching of the Jamunaha police post, area police station, and customs building on Tuesday. This has helped restore a semblance of order at the border.
Border trade stalls at Jaleshwar, customs revenue drops to zero
Cross-border trade at Jaleshwar has been severely disrupted due to the Gen Z protests, with customs activity nearly grinding to a halt since Tuesday. Tighter security checks at the Indian checkpoint and damage to Nepali offices have left more than 30 trucks stranded at the border, including those carrying consumer goods and aviation fuel.
The disruption followed a jailbreak on September 9 and an arson attack on the Jaleshwar Traffic Police. Authorities on both sides have since imposed strict control measures.
Customs Chief Rajendra Basnet reported that daily revenue collections—usually between Rs 3–4 million—have dropped to zero. Indian freight companies are now avoiding the route, compounding challenges for traders ahead of the Dashain festival season.
Bhatbhateni reopens nationwide after protest-related damage
Bhatbhateni Supermarket has resumed operations across several locations following extensive damage during the Gen Z protests. The retail chain confirmed that its outlets in Kathmandu Valley—including Tokha, Anamnagar, Satdobato, Sanagaun, Patan, Kalanki, RadheRadhe, Balaju, and the World Trade Center—are once again open.
Stores outside the Valley in Nepalgunj, Janakpur, Birgunj, Butwal, Dhangadhi, and Bhairahawa have also reopened.
In a public statement, Bhatbhateni thanked customers for their patience and support, stating: “We are back to serve you with the same care and commitment you have always relied on. Let’s move forward together toward brighter and more peaceful days.”
Bankers assure deposits are safe despite vandalism
The Nepal Bankers’ Association (NBA) has assured the public that deposits are secure, despite significant damage to banks, ATMs, and financial institutions during the recent Gen Z protests.
While the exact financial impact is still being assessed, NBA President Santosh Koirala confirmed that core banking systems and customer data remain unaffected. However, he acknowledged the sector’s growing concern over political instability, sluggish economic activity, and the potential rise in non-performing loans.
“The coming days will be more challenging. We must move forward with patience and responsibility,” Koirala stated, warning that business losses caused by the unrest could impact loan recovery.
Gold price hits all-time high at Rs 215,800 per tola
Gold prices in Nepal soared to a record high of Rs 215,800 per tola last week, marking a Rs 5,400 increase from earlier levels, according to the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA). The surge was partly driven by global market expectations of a U.S. Federal Reserve rate cut, amid weakening jobs data and inconsistent inflation. Silver also saw gains, rising Rs 75 per tola to reach Rs 2,565.
Insurance claims cross Rs 10 billion after Gen Z unrest
Insurance companies are bracing for claims exceeding Rs 10 billion (approximately USD 75 million) following the destruction caused by the Gen Z protests on September 9. The violence affected key business establishments including Bhatbhateni Supermarket, Hilton Hotel, Ncell, Chaudhary Group, and multiple vehicle showrooms.
Claims are expected under riot and terrorism coverage, with Nepal Reinsurance taking on a significant portion. The Insurance Board has urged companies to expedite the claims settlement process to help restore business confidence.
Despite limited resumption of bank and financial services, economists warn that the economic impact—including investor uncertainty and disrupted operations—could slow down Nepal’s post-crisis recovery.
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