KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is showing mixed signals, with capital markets posting modest gains and commodity prices rising even as government revenue collection falls significantly short of targets, raising fiscal stress concerns.
While sectors such as tourism, agriculture mechanization, and contract farming demonstrate growth momentum, persistent structural weaknesses—underperforming customs and income tax, long-delayed infrastructure projects now facing cancellations, and heightened pressure from the recent Gen Z protests—highlight governance and confidence challenges.
The government is attempting damage control through reconstruction commitments, investor-assurance pledges, and new market-standard policies, while institutions such as the IRD and FNCCI emphasize compliance and security amid unrest.
At the same time, labor demand abroad, especially through South Korea’s EPS system, and rising domestic consumption trends—from coffee to processed foods—underscore shifting socioeconomic patterns as Nepal grapples with both opportunity and instability.
NEPSE climbs 9.78 points; turnover edges up
The Nepal Stock Exchange (NEPSE) index rose by 9.78 points on Monday, closing at 2550. A total of 167 companies registered gains while 76 saw declines. Market turnover increased slightly to Rs 3.94 billion, compared to Rs 3.89 billion the previous day. Development Bank and Hotel & Tourism sectors led the market, each gaining more than 1%. Four companies—Bandipur Cable Car, Sagar Distillery, Bungwal Hydropower, and Jhapa Energy—recorded a 10% surge in their share prices. Bhugol Energy posted the largest drop, falling 10%.
Gold Price Increases by Rs 500 Per Tola
Gold prices in the domestic market rose by Rs 500 per tola on Monday. The Federation of Nepal Gold and Silver Dealers’ Association set the price of fine gold at Rs 243,300 per tola, up from Rs 242,800 on Sunday. Silver prices also increased, rising by Rs 20 to reach Rs 3,155 per tola.
Revenue collection misses target in first quadmester
The government collected only 77.49% of its revenue target during the first quarter of fiscal year 2025/26. Out of the planned Rs 425.23 billion, only Rs 329.51 billion was collected, according to the Ministry of Finance. As of November 16 alone, revenue met just 75.49% of the month’s target. Both customs and internal revenue underperformed—income tax collection reached only 65.59% of the Rs 93.23 billion goal. However, revenue from education service fees and a few other categories exceeded expectations by 125.10%.
Government seeks suggestions to set market standards and pricing
The Department of Commerce, Supply, and Consumer Protection has invited recommendations within 15 days to help define market tiers and pricing standards for goods and services. A committee led by Director General Roshan Gyawali will use the feedback to draft pricing and market-level guidelines under Section 13 of the Consumer Protection Act, 2018. The department emphasized that clear definitions of market structures are necessary to promote transparency, consistency, regulation, and consumer protection.
IRD honors top taxpayers on national tax day
Marking National Tax Day 2025, the Inland Revenue Department (IRD) recognized the top taxpayers of fiscal year 2023/24. Finance Minister Rameshore Khanal presented awards to individuals and institutions contributing the highest income tax. Raj Bahadur Shah received the award for highest individual taxpayer, while the Nepal Telecommunication Authority was recognized as the top corporate taxpayer. Other awardees included Dabur Nepal (Commodity/Export), Nepal Investment Bank (BFIs), Nobel Medical College (Health/Education), and Soaltee Hotel (Tourism). Nepal Telecom was honored for punctual tax payments.
Revenue slump signals mounting pressure on the treasury
Revenue collection from October 19 to November 16 declined sharply compared to the previous month, raising concerns about potential fiscal strain. Total first-quarter revenue reached Rs 329.51 billion—only 77.49% of the target. Revenue collected during the October–November period met just 75.54% of its monthly goal, falling short by Rs 14.13 billion compared to the September–October period. The decline was driven primarily by reduced import-based revenue, with customs duty fulfillment dropping from 89.17% to 68.93%.
South Korea employment prioritizes EPS manufacturing exam
The first phase of the Employment Permit System (EPS) language test for the manufacturing sector begins Monday. Out of 102,515 applicants seeking jobs in South Korea for 2025, 67,000 will take this initial test. The EPS office is prioritizing the manufacturing exam, expected to conclude within two months. Testing dates for the remaining 35,000 applicants in agriculture and livestock will be announced later.
Kailali farmers embrace mechanized potato planting for industry supply
First Choice Food, a French fries manufacturer based in Rupandehi, has introduced mechanized commercial potato farming in Kailali in partnership with over 100 farmers across 200 bighas (14,580,000 sq ft) in Tikapur. The Rs 2 billion industry requires 30,000 metric tons of premium potatoes annually and has committed to a minimum support price under its contract farming model. The company imported a planter from India capable of planting 50 bighas (3,645,000 sq ft) in eight hours and has provided technical training. This initiative aims to reduce production costs and secure a consistent supply for exports to the USA and India.
Domestic coffee consumption now outpaces local production
Coffee consumption within Nepal has grown significantly, with an estimated 70–80% of domestic production being consumed locally. Customs data for fiscal year 2024/25 shows Nepal exported 64 metric tons of coffee worth Rs 114.37 million, while imports reached 203 metric tons valued at Rs 144.1 million. To bridge the deficit, the National Tea and Coffee Development Board is promoting block plantations, offering a 50% subsidy for farmers cultivating coffee on 50 ropanis (273,800 sq ft) within the 45 districts currently producing coffee.
Agriculture ministry highlights challenges in spending Rs 49 billion budget
The Ministry of Agriculture and Livestock Development’s 2024/25 monitoring report shows the sector achieved 84.55% financial progress out of a Rs 49.69 billion budget. Successes included expanded mechanization under the Prime Minister’s Agricultural Modernization Project, which helped cut production costs by up to 70%. However, the report flagged major challenges: poor coordination across federal tiers, political interference in fertilizer distribution, low-quality seeds, and illegal cross-border imports. It recommends simplifying insurance and subsidy procedures to improve access for farmers.
Gen Z protest causes national loss of Rs 76 billion
A preliminary estimate of the damages from the Gen Z protest on September 8–9 places total national losses at around Rs 76 billion. Finance Minister Rameshore Khanal shared the assessment during an interaction organized by the Nepal Chamber of Commerce. Of the total damage, the private sector suffered Rs 36 billion across 55 districts. Altogether, 1,957 structures were affected—419 private and 1,500 government-owned. Insurance companies have been instructed to immediately advance 50% of claim amounts to support the private sector.
Ministry cancels 25 long-delayed road contracts
The Department of Roads, following directives from Minister Kulman Ghising, has begun terminating stalled road construction contracts. On Monday, the Kathmandu Road Division Office announced the cancellation of 25 inactive contracts dating from fiscal years 2010/11 to 2022/23. Office Chief Subodh Devkota noted that contractors’ explanations for non-performance were inadequate. The government will now initiate legal procedures to seize performance and advance guarantees, charge 10% interest on advance payments, and recover the cost of remaining work. The cancellations follow prolonged lack of progress on the projects.
Government Vows Investor Protection After Gen Z Protest
Finance Minister Rameshore Khanal reiterated the government’s firm commitment to safeguarding private-sector interests in the wake of concerns following the recent Gen Z protest. Speaking at a National Tax Day-2025 event on Monday, he acknowledged that the youth-led movement—driven by frustration over unemployment and lack of inclusion—caused an estimated Rs 78 billion in physical damages, affecting about 2,900 structures across 55 districts. He stated that Rs 120 billion has been allocated in the current fiscal year for reconstruction efforts. The minister also pledged improvements to the tax system, including ending full audits for compliant businesses, to bolster investor confidence.
Nepal Bank Limited Commits to Digital Governance
Marking its 89th anniversary, Nepal Bank Limited announced its priority goals of strengthening institutional governance, expanding digital services, and improving customer experience. Board Chair Prof. Dr. Dilli Raj Sharma said that as a “Public Treasury,” the bank must enforce strong governance practices to address challenges such as recovering non-performing loans and increasing market competition. CEO Tilak Raj Pandey noted that the bank—operating under a public-private partnership—serves 2.7 million customers through 231 branches and 237 ATMs across 71 districts. In the first quarter of FY 2025/26, NBL mobilized deposits worth Rs 342 billion and issued loans totaling Rs 237 billion.
Ilam Residents Protest Hydropower Companies Over Broken Promises
Residents of Ilam Municipality-8 have launched protests against the 9.8 MW Mai Beni Hydropower Project and the 3 MW Super Mai Cascade Project, accusing both companies of failing to honor commitments made during the construction phase. Locals living within a one-kilometer radius of the projects say the promised infrastructure and social development—such as road blacktopping, drinking water supply, and school investment—remain unfulfilled. According to local resident Man Bahadur Gurung, protestors have warned they will obstruct ongoing reconstruction work, which began after the October 4 flood, unless their demands are addressed.
Upper Mustang Welcomes 1,710 Foreign Tourists
Upper Mustang recorded 1,710 foreign visitors between July 17 and November 16, according to the Annapurna Conservation Area Project (ACAP) office in Lomanthang. ACAP Chief Umesh Paudel reported that the figure includes 44 tourists from SAARC countries and 1,666 from other nations, with most visitors arriving from France, the United States, Germany, and Italy. Tourists pay Rs 1,000 (SAARC) or Rs 3,000 (non-SAARC) in entry fees to ACAP, while the Department of Immigration charges a USD 500 permit for a 10-day visit.
Mountain Tourism Revenue Triples in Three Years
Nepal’s mountain tourism sector has reached its strongest performance in three years, driven by a surge in high-spending domestic and international climbers. According to the Department of Tourism (DoT), revenue from mountaineering permits has nearly tripled between 2023 and 2025. DoT Director Himal Gautam said that in 2025, a record 2,745 climbers from 93 countries registered to scale 73 peaks—the highest number on record. The 2025 autumn season alone brought in Rs 264.1 million in revenue from 1,538 climbers representing 83 countries.
FNCCI Urges Strict Action Against Gen Z Protest Vandals
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged Inspector General of Police Dan Bahadur Karki to take firm action against those responsible for vandalism, arson, and looting of businesses and private property during the Gen Z protest. A delegation led by FNCCI President Chandra Prasad Dhakal warned that inaction would promote impunity and deter investment. Former FNCCI President Shekhar Golchha stressed that security is the foundation of an investment-friendly climate and called on Nepal Police to register all related complaints.
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