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 mixed signals, with government spending crossing Rs 1.5 trillion in FY 2024/25—achieving over 81% of its expenditure target—yet capital spending continues to lag behind, highlighting persistent inefficiencies in project execution.
In the financial sector, NEPSE ended the week on a bearish note with a 2.18% decline, mirroring cautious investor sentiment, even as commercial banks show an average dividend payout capacity of 11%, led by Everest Bank at 38%.
Amid declining agricultural outputs like potatoes in Myagdi and late millet planting in Bhojpur, localized success stories such as commercial apple farming in Tarakhola offer glimmers of rural resilience. Meanwhile, calls from top officials for stronger economic reforms and targeted sectoral pushes underscore the urgency of revitalizing growth, particularly as monetary conditions remain favorable.
External risks, such as monsoon-induced disasters, also continue to challenge infrastructure and mobility, prompting an extension of the BP Highway night travel ban.
Govt spending crosses Rs 1.5 trillion in FY 2024/25
The government spent a total of Rs 1.508 trillion in the fiscal year 2024/25, up from Rs 1.4 trillion in FY 2023/24, according to figures presented at the annual progress review and performance agreement exchange ceremony held at the Office of the Prime Minister and Council of Ministers. Of the total expenditure, recurrent spending reached Rs 980.38 billion, or 85.95% of the target, while capital expenditure stood at Rs 222.68 billion, or 63.2% of the target. Financial management expenditure reached Rs 320.04 billion, equivalent to 87.87% of the target. Compared to the previous fiscal year, recurrent spending increased by 2.94%, and capital spending rose by 16.15%.Overall, the government achieved 81.87% of its annual expenditure target.
NEPSE ends the week with 2.18% decline
The NEPSE Index wrapped up the trading week at 2,788.36 points, down by 62.01 points or 2.18% compared to the previous week’s close of 2,850.37. This marks a continued decline, following a 2.47% drop the week before. Throughout the week, the index fluctuated between a high of 2,875.45 and a low of 2,784.15, reflecting a volatility range of 91.3 points—slightly lower than last week’s 97.02-point range. Overall, the week’s total turnover reached Rs 30.75 billion, with over 7.78 crore shares traded across 3,23,392 transactions.
Nepal Oil Corporation revises fuel prices
Nepal Oil Corporation (NOC) has revised the prices of petroleum products, announcing the changes through a press release issued on Friday evening. According to the Corporation, the price of petrol has been increased by Rs 2 per liter, while the prices of diesel and kerosene have been reduced by Rs 1 per liter. The revised prices will come into effect starting Saturday, the Corporation stated.
Commercial banks’ dividend payout capacity up to 38 percent
All 19 listed commercial banks have made their financial statements public for the last fiscal year, allowing stock investors to estimate potential dividends. Based on unaudited financial statements, four banks—Nepal Bank Ltd., Kumari Bank, NIC Asia, and Himalayan Bank—are not in a position to pay dividends this year. Nepal Investment Mega, with only a marginally positive dividend capacity, is also likely to withhold dividends. On average, the dividend payout capacity of the 19 listed commercial banks is 11 percent. Eleven banks have the ability to pay double-digit dividends this year. Everest Bank leads with the highest dividend payout capacity at 38 percent.
Gold, silver prices fall slightly
Gold prices declined slightly on Friday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold dropped by Rs 600 per tola to Rs 196,200. Silver also saw a decrease of Rs 25 per tola, with the new rate set at Rs 2,315.
Officials call for stronger push to revive country’s economy
Senior government and financial sector officials have stressed the need for stronger efforts to boost Nepal’s economy, despite indicators showing signs of stability. Speaking at a meeting of the Ministry-level Development Committee, National Planning Commission Vice-Chairman Prof. Dr. Shiva Raj Adhikari said that while economic indicators were satisfactory, confidence among both the private and public sectors needed strengthening. Nepal Rastra Bank Governor Prof. Dr. Biswo Poudel urged the government to give a big push to certain sectors to stimulate growth, particularly at a time when interest rates are low. Finance Secretary Ghanshyam Upadhyay called for a review of past targets and results to improve focus, while Revenue Secretary Dinesh Kumar Ghimire stressed the urgency of implementing programs effectively and reforming revenue administration.
Tarakhola rural municipality chairman turns trial apple farming into commercial success
The apple farming venture started six years ago by Man Bahadur Roka, chairman of Tarakhola Rural Municipality-5, with seedlings brought from Jumla for trial purposes, has now developed into commercial production. Royal Red and Italian Fuji are the main attractions of his orchard. Roka initially planted 100 seedlings but was able to save only 80. Today, he has 140 fruit-bearing apple trees of various varieties, spread over four ropanis of land. He plans to expand the cultivation to six ropanis in the near future, with a long-term goal of 10 ropanis.
Potato production in pocket areas decreases
Potato production has declined in Annapurna Rural Municipality-8, including Nangi, Ramche, and Kafaldanda, key potato-growing areas in Myagdi. The drop in output has made it difficult to meet demand. Potatoes grown in these cold-climate areas are known for their taste and nutrition, making them popular in urban markets. Considered a food crop for export in the ward, potato farming used to provide good income for local farmers. However, the recent decrease in production has left them unable to satisfy demand, said Rammaya Pun, a farmer from Nangi and member of Annapurna Rural Municipality.
Farmers in a hurry to plant millet
Farmers in Bhojpur are busy planting millet, which is grown as a second crop in fields previously planted with maize. Millet cultivation takes place across all nine local levels of the district, including Bhangeri, Bokhim, Dumsika, and Dawa of Bhojpur Municipality. Farmers said that a lack of timely rainfall this year delayed millet planting in valley areas. With recent rains, they have now begun sowing. Millet sells for Rs 50–60 per kilogram in local markets. Local farmer Ram Bahadur Khatri urged the government to introduce a special program to promote millet, a native crop.
BP Highway night travel ban extended till September 30
Authorities have extended the nighttime ban on vehicular movement along the BP Highway until September 30, citing the risk of floods and landslides. According to the Kavre District Administration Office, private and public vehicles will not be allowed to operate between 5 pm and 5 am until September 30. With the monsoon still active across the country, officials say heavy rains could trigger disasters such as floods and landslides at any time, prompting the decision to extend the ban by another 15 days. The local administration had first enforced the restriction on June 21, barring vehicular movement between 5 pm and 5 am to mitigate risks posed by monsoon-induced disasters.
Arun Valley Hydropower posts strong Q4 profit growth
Arun Valley Hydropower Development Company Limited (AHPC) has reported a significant improvement in its financial results for the fourth quarter of FY 2081/82, registering a net profit of Rs. 44.81 crore, up sharply from Rs. 4.92 lakh in the same quarter last year. The company’s paid-up capital reached Rs. 3.84 billion, marking a 3% increase from the previous year, while other equity jumped 231.74% to Rs. 47.12 crore. Property, plant, and equipment remained largely unchanged at approximately Rs. 2.62 billion.
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