KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is currently navigating a complex landscape shaped by both structural reforms and the aftermath of the Gen Z protests. On one hand, remittance inflows have hit record highs, boosting foreign currency reserves to unprecedented levels and contributing to stability in the external sector.
On the other, domestic spending patterns reflect shifting priorities—overseas education spending has slightly dipped, and consumer sentiment is seen in rising demand for apples and gold ahead of the festival season. The government is pushing for fiscal discipline, cutting fragmented projects and opening subsidized food outlets to ease economic pressure on households.
Meanwhile, key sectors like tourism, energy, and aviation are still reeling from the protests, with insurance claims mounting and infrastructure damages exposing gaps in public risk management. Amid this uncertainty, local agricultural expansion and infrastructure upgrades—such as the new terminal at Gautam Buddha Airport—signal grassroots resilience and cautious optimism for recovery.
Banks announce new interest rate changes
Banks and financial institutions have released interest rate schedules for the period from mid-September to mid-October. Nine commercial banks have made small adjustments, while the others kept their rates unchanged. Across 20 banks, ordinary fixed deposit rates vary between 2.75% and 2.80%. Savings accounts have restrictions ensuring less than a 2% spread across account types, and remittance accounts may offer an extra 1% interest.
Gold prices hit record high in domestic market
Gold prices in Nepal hit an all-time high on Tuesday, reaching Rs 217,100 per tola. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price increased by Rs 1,900 compared to Monday’s rate of Rs 215,200. Silver prices also climbed during the same period.
Remittances drive foreign currency reserves to new high
Thanks to a steady rise in remittance inflows, Nepal’s foreign currency reserves have surged to Rs 2.80 trillion in the first month of fiscal year 2025/26—about US$20.03 billion—a record high. Remittances have exceeded Rs 100 billion each month for the past 30 months, bolstering reserves significantly.
Finance Minister orders cut in fragmented projects
Finance Minister Rameshwar Khanal has instructed that fragmented and under-prepared projects be removed from this fiscal year’s budget. A three-member committee has been formed—led by Suman Dahal, Chief of the Budget and Program Division, with Revenue Division Chief Uttarkumar Khatri and Foreign Aid Coordination Division Chief Dhaniram Sharma—to propose which projects should be cut.
Expenditure on overseas education dips slightly
Spending on foreign education rose to Rs 14.31 billion in a single month, though this is slightly less than the Rs 14.96 billion recorded over the same period last year. Travel-related expenditures under the service account dropped by 2.8%, totaling Rs 21.70 billion, compared to Rs 22.32 billion during the same month last year, according to data from Nepal Rastra Bank.
Insurance claims for protest damage begin arriving
Following the protests of September 8–9, non-life insurance firms have begun processing claims for physical damages. As of Monday, about Rs 25 billion worth of claims have been submitted. While many initial claims are large, they do not guarantee full payment. Approximately 1,000 claims have been lodged so far, with more expected.
Government structures uninsured, face huge losses
While private properties have received insurance payouts after the Gen Z protests, many public structures were left uninsured. Buildings such as Singha Durbar, the Prime Minister’s residence, the President’s House, Parliament, ministerial residences, police offices, and local government buildings have not been insured, meaning potential losses run into billions.
Tourism sector meets to plan post protest revival
On Monday, the Ministry of Culture, Tourism and Civil Aviation met with the Nepal Tourism Board and private sector tourism entrepreneurs to evaluate the impact of the Gen Z protests on tourism infrastructure. Participants vowed to accelerate recovery, and Hari Prasad Mainali, Secretary of the Ministry and Chairman of the Tourism Board, said policy barriers would be removed to support industry reform.
BP Highway to operate 24 hours from September 17
Because monsoon related risks had previously forced nighttime restrictions, the BP Highway has been approved for continuous 24 hour operation starting September 17. The District Security Committee of Kavrepalanchok made the decision to accommodate increased traffic during Dashain and Tihar, stressing that road safety protocols will be maintained.
New arrival hall opens at Gautam Buddha Airport
Gautam Buddha Airport in Bhairahawa has inaugurated a new arrival hall aimed at improving passenger experience. The internal terminal—built 50 years ago—had inadequate facilities. The cargo building has now been converted into the arrival hall, which began operations on Monday. Previously, visitors often had to wait outdoors, even in inclement weather, due to poor baggage handling and the lack of a waiting area.
Bhotekoshi hydropower shuts down amid protest pressure
The 44 MW Bhotekoshi Hydropower Company halted electricity generation in response to pressure from Gen Z protesters demanding 10% local shares. Workers left the plant for safety reasons, and the army later secured the facility. Although the company originally agreed in 2014 to provide 6% local shareholding, it has not fulfilled that agreement, prompting locals to demand the remaining 4%.
Over 1,000 vehicles destroyed during protests
More than 1,000 vehicles were destroyed in the area around Singha Durbar and nearby government offices during the Gen Z protests. Initial reports show that 441 were four wheelers and 601 were two wheelers. The figures do not yet include all agencies, nor do they cover vehicles that were damaged but not completely destroyed. Authorities say a full estimate of economic losses will take more time.
Cathay Pacific suspends flights to Nepal
Hong Kong-based Cathay Pacific Airways has temporarily suspended its flights to Nepal. Travel agents were notified that flights between September 15 and October 14 have been canceled. While services resumed briefly following the Gen Z protests, the airline has now halted regular operations. Travel agencies believe the decision is linked to a drop in tourist arrivals following the unrest.
Commercial banana farming expands in Dang
Dang district has seen a rise in commercial banana cultivation, with more farmers joining the sector. According to Nabaraj Bhandari, head of the Agriculture Knowledge Center, banana farming expanded to 730 hectares in fiscal year 2024/25, producing 9,973 metric tons. This marks a 150-hectare increase from the previous year, which recorded 670 hectares under cultivation.
Apple prices rise ahead of festivals
With major festivals approaching, apple prices have surged in local markets. According to the Kalimati Fruit and Vegetable Market Development Committee, the wholesale price of Fuji apples rose by Rs 34 per kilo on Tuesday, reaching Rs 310 per kilo. On Monday, the same variety was priced at Rs 276 per kilo.
Mawlakali cable car to resume service soon
The Mawlakali Cable Car in Nawalparasi, which suffered fire and vandalism during the Gen Z protests, will soon be operational again. The operating company stated that the service, built with the investment of thousands of local shareholders, is being restored to serve the public.
Small industries in Dhankuta face closure
Over the last five years, 178 small and domestic industries in Dhankuta have closed down, primarily due to competition from imported goods. According to district records, 366 industries were registered in fiscal year 2021/22, with 10 later shutting down. In 2022/23, of the 516 registered, 26 applied for closure.
Subsidized shops open in Jumla ahead of festivals
To ease the financial burden during Dashain, Tihar, and Chhath, subsidized food shops have been launched in Jumla. Starting Monday, the Food Management and Trade Company began selling 1,100 quintals of rice at discounted prices. The initiative was inaugurated by Gaurinand Acharya, Chief of the District Coordination Committee.
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