KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape presents a mixed outlook, reflecting both cautious optimism and persistent structural challenges. The stock market showed resilience after a six-day decline, with the NEPSE index rebounding, though trading volumes fell—suggesting lingering investor uncertainty.
Government fiscal performance remains underwhelming, with only 62.24% of the budget utilized in ten months and capital expenditure lagging at 34%, raising questions about spending efficiency.
Meanwhile, public debt saw a rare monthly decline, driven by higher loan repayments, even as development projects and essential sectors like agriculture and dairy struggle due to underfunding and payment backlogs.
Regulatory enforcement increased, with SEBON penalizing brokerage firms for compliance failures, while discussions on civil aviation reform and IPO launches point to institutional evolution.
However, ambitious national goals such as LDC graduation by 2026 appear threatened by inadequate coordination and budgetary support, underscoring the need for stronger execution and policy coherence.
Government spends only 62.24% of budget in 10 months
The federal government, which set a target of spending NPR 1,860.30 billion in the current fiscal year 2081/82, has only managed to spend 62.24% in the first ten months (Shrawan–Baisakh). Of this, capital expenditure is just 34%.
The government aims to accelerate spending in the next two months (Jestha–Ashar) to achieve around 80% capital expenditure, employing measures like fund transfers and additional disbursements. This recurring trend in recent years raises questions about the government’s allocation efficiency and the quality of projects completed in the fiscal year’s final months.
Nepal’s stock market rebounds after six-day decline
Nepal’s stock market, which had been experiencing a continuous decline for six consecutive days, rebounded on Monday. The NEPSE Index increased by 19.30 points compared to the previous trading day, closing at 2,628. Despite the rise in the index, the overall trading volume saw a decline.
On the previous day, the total transaction amount was recorded at NPR 8.50 billion, whereas it dropped to NPR 7.35 billion on Monday. The share prices of 185 companies went up, while 60 companies saw a decline, and two remained unchanged.
Among the various sectors, the Hotel and Tourism sector was the only one to experience a drop, sliding by 1.24%, while all other sectors showed positive growth. The Development Bank Group registered the highest growth, with an increase of 1.88%.
Auditor General questions legitimacy of export incentive scheme
The Auditor General’s report has once again raised questions over the legitimacy of the government’s export incentive scheme, aimed at boosting domestic production and promoting exports to reduce trade imbalances.
The report noted that, similar to previous years, there are questions about the distribution of grants under the scheme, which has been disbursed without legal backing. The report stated that the budget announcement for FY 2068/69 mentioned providing export subsidies, which were gradually increased from 1% to between 3% and 5% in recent years.
Gold price edges up in domestic market
The price of gold in Nepal rose slightly on Monday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the rate for hallmark gold increased by NPR 600 per tola, climbing from NPR 184,200 to NPR 184,800. Meanwhile, the price of silver remained unchanged at NPR 1,945 per tola.
SEBON penalizes 11 brokerage firms for failing to submit reports
The Securities Board of Nepal (SEBON) has penalized 11 brokerage firms for failing to submit anti-money laundering reports on time. As per SEBON regulations, firms are required to submit semi-annual reports within 15 days of the end of the period. SEBON spokesperson Niranjay Ghimire stated that the companies were first issued a written warning.
Following a decision by SEBON’s Board of Directors on 25th Baisakh, a letter of penalty was sent to the firms on Sunday. The penalized firms include Bluechip Securities, Property Wizard, StockScarts Securities, Sumeru Securities, Roadshow Securities, Sagarmatha Securities, Infinity Securities, Magnet Securities & Investment Company, Elite Merchant Capital, Reliable Investment & Merchant Capital, and Reliable Venture Capital.
Govt faces pressure to increase salaries amid revenue collection challenges
With stagnant revenue collection, the government is under pressure to increase the salaries of public servants, including civil service employees, police, army personnel, and teachers this fiscal year. The government had agreed to revise the salaries every three years as per an agreement with civil servants.
However, there has been no increase in salaries for the past two years, forcing the government to consider adjustments this year. Although initial discussions have taken place at the Ministry of Finance, which is currently busy preparing next year’s budget, no decision has been finalized yet.
Public debt reduced by NPR 44.86 billion by end of Baisakh
Nepal’s outstanding public debt stood at NPR 2.622 trillion by the end of Baisakh, marking a decrease of NPR 44.86 billion from the previous month. As of Chaitra, the debt had been NPR 2.667 trillion. This reduction is attributed to higher repayments of old loans compared to the collection of new ones. Gopi Krishna Koirala, the head of the Public Debt Management Office, confirmed the debt decline was due to repayments exceeding new debt acquisition.
Nepal imports Rs 47.8 billion worth of food grains in first nine months of FY 2081/82
Agriculture, Cooperatives, and Livestock Development Minister Ramnath Adhikari announced that Nepal imported food grains worth Rs 47.8 billion by the end of Chaitra (April) in the current fiscal year 2081/82, while exports stood at just Rs 62 million.
Minister Adhikari reported a trade deficit of Rs 47.7 billion in food grains, alongside vegetable imports worth Rs 31.52 billion and exports of Rs 408.2 million. Additionally, fruit imports amounted to Rs 18.2 billion, with exports reaching only Rs 17 million.
Civil Aviation Bills Sent for Clause-by-Clause Discussion in Parliament
Two bills related to the Civil Aviation Authority of Nepal (CAAN) and Nepal Air Service Authority have been sent to the International Relations and Tourism Committee of the House of Representatives for clause-by-clause discussion.
Minister for Culture, Tourism, and Civil Aviation, Badri Pandey, presented the bills in the House session on Sunday, proposing they be sent to the committee for detailed discussion. Speaker Devraj Ghimire announced the proposal’s unanimous approval through a voice vote. The bills will now be reviewed in detail by the committee before moving forward.
Insufficient budget to graduate Nepal from LDC Status by 2026
Industry, Commerce, and Supplies Minister Damodar Bhandari stated that the budget allocated is insufficient for Nepal to graduate from the Least Developed Country (LDC) status by 2026.
Speaking at a meeting of the Development, Economic Affairs, and Good Governance Committee under the National Assembly, Minister Bhandari said that the lack of budget has hindered the implementation of the “Smooth Transition Strategy” prepared by the government. He added that due to a lack of inter-agency coordination, the strategy has not been implemented effectively.
Government development projects lagging behind as fiscal year ends
As the current fiscal year 2081/82 nears its end, government offices related to development and infrastructure projects are showing weak progress, highlighting Nepal’s slow pace of development, experts say.
The Department of Roads, with a budget of Rs 117 billion, the Department of Building with Rs 51 billion, and the Local Infrastructure Department (DOLI) with Rs 18 billion have shown minimal progress compared to last year. According to Bimarjun Adhikari, spokesperson for the Ministry of Physical Infrastructure and Transport, the ministry’s overall progress until the end of Baisakh is only 41%, with the Department of Roads showing 42% progress.
Construction sector shows signs of recovery in current fiscal year
According to the National Statistics Office, Nepal’s construction industry, which contracted by 2.2% in the previous fiscal year 2080/81, is projected to grow by 2.21% in the ongoing fiscal year.
This anticipated rebound signals a modest recovery. Financial statements from publicly listed cement producers such as Sarbottam, Shivam, Ghorahi, and Sonapur indicate rising revenues, further suggesting sectoral improvement.
Nepal Telecom’s profit declines by 48.6%
Nepal Telecom’s profit decreased by 48.6% during the first nine months of the current fiscal year. The company earned a net profit of NPR 2.84 billion, down from NPR 5.53 billion in the same period last year.
The drop in profit is primarily due to a sharp decline in interest income, which fell by 46%. Telecom’s interest income plummeted from NPR 5.19 billion to NPR 2.80 billion during this period.
Trade Tower’s public offering opens on May 28
Minister Dahal launches blacktopping of Mahure–Foksingtar road
Devendra Dahal, Minister for Physical Infrastructure and Transport, inaugurated the blacktopping of the Mahure–Foksingtar road. The road, which was originally initiated by former Prime Minister Manmohan Adhikari in 2051 B.S., is now being resurfaced.
The government allocated NPR 860 million for the blacktopping of the Foksingtar–Simapani and Simapani–Mahure sections under the Dikhtel–Gaighat road project, according to Project Chief Engineer Pashupati Gyawali.
Trade Tower will launch its Initial Public Offering (IPO) for the general public on May 28. Shares have already been allocated to Nepali workers employed abroad. Out of a total of 3,971,693 shares, 10% are reserved for foreign-employed workers, 5% for mutual funds, and 2% for company employees.
The remaining 3,296,505 shares are available to the public. Interested investors can apply via MeroShare or bank branches until June 2, with applications ranging from a minimum of 10 shares to a maximum of 1,000.
Land and property transactions generate Rs 37.76 billion in revenue in 10 months
The Department of Land Management and Records reported that revenue from land and property transactions reached Rs 37.76 billion during the first ten months of the current fiscal year. The highest monthly collection occurred in Baisakh (Rs 4.54 billion), while Kartik saw the lowest (Rs 2.70 billion).
Other monthly figures include: Shrawan (Rs 3.83 billion), Bhadra (Rs 3.09 billion), Ashoj (Rs 3.08 billion), Mangsir (Rs 3.87 billion), Poush (Rs 4.25 billion), Magh (Rs 3.87 billion), Falgun (Rs 4.12 billion), and Chaitra (Rs 4.39 billion).
Ncell commits to digital accessibility for people With disabilities
Ncell has signed the GSMA’s Digital Inclusion Principles for People with Disabilities, emphasizing its dedication to digital accessibility. GSMA, a global organization representing mobile network operators, promotes equitable digital access for individuals with disabilities. Ncell’s endorsement of the initiative affirms its alignment with these global inclusivity standards.
Iwakhola Hydropower Project suspended for maintenance
The Iwakhola Hydropower Project, managed by Ridi Power Company Limited, has ceased operations for four days due to technical issues. Located along the border of Taplejung and Panchthar districts, the 9.9 MW project draws water from the Indrawati River. Maintenance is underway to replace faulty equipment and restore power generation.
Dairy farmers await payments as backlog crosses six months
Dairy farmers across Nepal have not received payments for more than six months, despite peak production during Kartik through Chaitra. Surplus milk is often processed into butter and powder for use in the dry season, starting from Baisakh.
The Central Dairy Cooperative Association Limited reported that dairy industries owe over Rs 5 billion to farmers. Private companies owe Rs 3.5 billion, while the government-run Dairy Development Corporation (DDC) is responsible for Rs 1.5 billion, according to General Secretary Ram Acharya.
Koshi Province unveils policy for fiscal year 2082/83
Koshi Province presented its policy and program for fiscal year 2082/83 during a Provincial Assembly session today. Parshuram Khapung, the Province’s Chief, announced the policy at 3 PM. The newly introduced framework outlines development priorities and strategic goals for the upcoming fiscal year.
Blacktopping Starts on Sanga–Dhulikhel Section of Araniko Highway
Work has commenced on resurfacing the Sanga–Dhulikhel section of the Araniko Highway, which is being expanded into a six-lane road. As part of the Surya Binayak–Dhulikhel and Dhulikhel–Sindhuli–Bardibas road initiative, the goal is to complete the three-kilometer Dhulikhel–Banepa stretch by the end of Ashar. Project Engineer Bishnu Prasad Khanal reported that one kilometer of work has already been completed.
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