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 momentum, with capital markets softening as NEPSE edges down and investors shift toward commodities amid a sharp rise in gold prices, while foreign grants—most notably the U.S. MCC’s additional USD 50 million—continue to underpin large infrastructure projects.
Liquidity absorption by Nepal Rastra Bank highlights persistent excess liquidity even as foreign employment surges over 20%, reflecting domestic job scarcity and sustained overseas demand. Provincial and sectoral data reveal chronic structural weaknesses: low capital spending in Lumbini, underutilized industrial capacity in Koshi and Sudurpaschim, and heavy fertilizer shortages threatening agriculture.
At the same time, rising regulatory scrutiny—from casino compliance mandates to allowances reform—signals government attempts to tighten governance. Infrastructure expansion remains uneven, with progress in Biratnagar Airport and Daram Khola hydropower contrasting with delays like the Surkhet–Dailekh transmission line.
Social and disaster-related pressures persist, including relief for Gen Z protest victims and major agricultural losses in Ilam, underscoring the broader tension between fiscal constraints, governance challenges, and the need for sustained economic resilience.
NEPSE slips 4.98 points as trading hits Rs 377.86 million
The Nepal Stock Exchange (NEPSE) index declined slightly on Wednesday, dropping 4.98 points to settle at 2,561.08. A total of 8,388,373 shares from 338 listed firms changed hands through 50,626 transactions, resulting in a turnover of Rs 377.86 million. Gains were recorded only in the Hotel & Tourism, Manufacturing & Processing, Mutual Fund, and Trading sub-indices. Barun Hydropower topped the turnover chart with trades worth Rs 274.04 million.
Gold price rises by Rs 2,800 per tola
Hallmark gold prices jumped by Rs 2,800 per tola on Wednesday, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold now trades at Rs 242,300 per tola, up from Rs 239,500 on Monday. Silver prices also increased by Rs 60 per tola, reaching Rs 3,150. The sharp rise follows trends in the international market.
U.S. adds USD 50 million grant to MCC Nepal Compact
Nepal and the U.S. Millennium Challenge Corporation (MCC) have announced an additional grant of USD 50 million (around Rs 7 billion) for the MCC Nepal Compact. This raises the total grant size to USD 747 million (approximately Rs 106 billion), including USD 550 million from the U.S. and USD 197 million contributed by Nepal. The extra funds will support the completion of key electricity transmission infrastructure, boost energy system reliability, and enhance regional energy trade. The grant is non-debt, aimed at promoting U.S. standards and practices.
NRB to absorb Rs 50 billion liquidity through deposit instrument
The Nepal Rastra Bank (NRB) will withdraw Rs 50 billion of excess liquidity from the banking system on Wednesday via an 84-day deposit collection instrument. The central bank has been relying more on longer-tenor deposit tools, having already used a similar Rs 50 billion instrument earlier this week. As of November 18, the market holds around Rs 79 billion in surplus liquidity. NRB uses mechanisms such as deposit collections and standing deposit facilities to guide interbank rates, currently anchored by a 6% bank rate and a 2.75% standing deposit facility rate.
Foreign employment rises 20.29% in first four months of fiscal year
Labor migration surged by 20.29% in the first four months of the current fiscal year, with 273,805 Nepalis obtaining work permits. The figure is up by 46,190 compared to 227,615 permits issued during the same period last year. Women receiving permits increased by 13% to 33,815. Experts attribute the jump to shrinking job opportunities within Nepal and strong labor demand abroad, despite temporary disruptions such as the visa freeze tied to the Gen Z movement.
Nepal maintains ‘BB–’ credit rating for 2025 despite political risks
Fitch Ratings has affirmed Nepal’s sovereign credit rating at BB Minus (BB–), matching its initial rating. The grade reflects moderate repayment ability but signals underlying economic vulnerabilities. During a visit from November 4 to 6, Fitch expressed concern over political instability but acknowledged Nepal’s detailed reforms and its resilience during the pandemic and the 2015 earthquake. The agency said Nepal’s low internal and external debt supports the rating and forecasted the federal deficit at 3.5% of GDP this fiscal year.
Govt approves relief funds for 2,429 injured Gen Z protesters
The Cabinet meeting held Tuesday at the Office of the Prime Minister approved a relief package of Rs 15,000 each for 2,429 people injured in the recent Gen Z protests, according to Information Minister Jagdish Kharel. The Cabinet also recommended an ordinance to amend the Nepal Special Service Act, 1985. Additionally, the government accepted roughly USD 5 million in grant aid from Norway and Rs 281.4 million from Switzerland for governance support programs.
Agriculture ministry races to secure DAP fertilizer for paddy planting
With a projected deficit of 60,000 metric tons of DAP fertilizer for the upcoming summer paddy season, the Ministry of Agriculture and Livestock Development is scrambling to secure supplies. Despite allocating Rs 28.821 billion for fertilizer procurement in FY 2025/26, rising global prices have strained the budget. After the Ministry of Finance rejected a request for an additional Rs 10 billion, the ministry is now exploring fund transfers or price revisions. Nepal currently has 105,259 metric tons of fertilizer in storage, with urea costing Rs 64 per kg but subsidized to Rs 15 for farmers.
Study finds state employees receive up to 41 types of allowances
A government task force has found that public institutions—including regulators and state-owned enterprises—have been granting excessive salaries and benefits, with employees receiving as many as 41 different allowances. The report identified the Employees Provident Fund and the Civil Aviation Authority of Nepal as having the highest average annual incomes, at Rs 2.22 million and Rs 2.06 million respectively. The task force recommended that any decision creating financial liabilities must receive approval from the Ministry of Finance and proposed a uniform framework to streamline employee compensation.
Lumbini posts only 11.53% budget spending in first four months
Lumbini Province spent just 11.53% of its budget in the first four months of FY 2025/26, with capital expenditure at 9.53% and recurrent spending at 14.28%. The total provincial budget stands at Rs 38.81 billion. The Ministry of Health had the highest spending rate at 30.43%, followed by the Ministry of Industry, Tourism, and Transport at 15.14%. The Ministry of Youth and Sports used 4.78% of its recurrent budget but recorded zero capital expenditure, continuing the trend of rushed year-end spending that undermines quality.
Sudurpaschim forecasted to contribute 7.03% to national GDP
The Nepal Rastra Bank’s annual economic review for Sudurpaschim Province estimates a 3.32% economic growth rate and a 7.03% contribution to Nepal’s GDP for FY 2024/25. Agriculture, forestry, and fisheries are expected to account for 34.72% of the provincial economy. The study shows industries operating at only 34.47% capacity. Credit to agriculture fell by 3.41% to Rs 15.964 billion, while industrial loans rose 4.37% to Rs 26.720 billion as of mid-July 2025.
Koshi Province industry capacity drops to 50.80%
Industrial capacity utilization in Koshi Province declined to 50.80% in FY 2024/25, down from 52.59% the previous year. The tyre and tube manufacturing sector had the highest utilization at 90.67%, while the ghee industry recorded the lowest at just 4.37%. Soybean oil production jumped 1,449% due to increased external demand, whereas domestic metal goods production fell 74.3% because of weaker demand and competition from cheaper imports. Koshi’s growth is preliminarily estimated at 3.34%.
Karnali electric cable factories operate at 90% capacity
According to a Nepal Rastra Bank study, Karnali Province’s electric wire and cable manufacturers operated at 90% capacity in FY 2024/25, significantly higher than the province’s overall industrial average of 46.52%. The carpet sector showed the lowest utilization at 23.08%. Although cultivated agricultural land shrank by 6.08%, major infrastructure projects—including the Mid-Hill Highway and the Bheri Babai Diversion—are progressing and are expected to stimulate economic activity.
Lumbini industries attract Rs 327.57 billion in investment
Industrial investment in Lumbini Province has reached Rs 327.57 billion across 756 large-scale industries registered with the Department of Industry as of mid-July 2025. These enterprises employ 76,080 people across 12 districts. Rupandehi accounts for the largest share at 38.62% (Rs 103.74 billion). The Nepal Rastra Bank report highlights ongoing challenges such as inconsistent electricity supply, raw material shortages, and the migration of skilled workers.
KMC revenue exceeds last year’s collection by Rs 5.65 million
The Kathmandu Metropolitan City collected Rs 3.224 billion in revenue during the first four months of FY 2024/25, surpassing last year’s Rs 3.167 billion for the same period—an increase of Rs 56.5 million. However, internal revenue declined by Rs 22.09 million, mostly due to a drop in property tax collection from Rs 503.1 million to Rs 427.6 million. Revenue Department Chief Deepak Adhikari attributed the decrease to adjustments made after a Supreme Court ruling reinstated local authority over rental taxes.
Ilam tea sector faces Rs 47.29 million loss from landslides
Landslides triggered by heavy rainfall on October 4 caused damages exceeding Rs 47.29 million to tea plantations in Ilam district, according to the Central Tea Cooperative Federation. A total of 97 farmers from 41 cooperatives lost their tea gardens. Overall agricultural damages reached Rs 273.995 million, affecting 3,400 farmers and destroying 892 hectares of land. The district recorded 39 deaths and 338 houses completely destroyed. Despite Ilam being declared a crisis zone for three months, no reconstruction funds or relief support have yet been provided.
KMC starts construction of sports park worth Rs 28.14 million
The Kathmandu Metropolitan City has begun constructing a sports park on 5 ropani, 10 ana, and 2 paisa (2,880 sq m) of public land in Ward 10, Devinagar—land previously cleared of encroachment in July 2023. The Rs 28.14 million project, awarded to Hans-Chhapur Joint Venture, is expected to be completed by October 4, 2025. The park will include a futsal ground, badminton court, open gym, and nearly 312 sq m of green space.
Rupandehi trade body sees multiple contenders in leadership race
The Rupandehi Trade Association will hold its 24th AGM and 13th Convention on Friday, where Prakash Dhakal and Dayanidhi Bhandari are vying for the president’s post. The senior vice president role has two candidates—Parshuram Pant and Prem Nath Pandey. Several positions were filled unopposed, including first vice president (Rishiram Pandey), general secretary (Prakash Paudel), treasurer (Arjun Bhattarai), women’s secretary (Brinda Bhattarai Acharya), and co-treasurer (Jeevan Narayan Ghimire). A total of 2,578 members are eligible to vote.
Foreigners must now pay USD 50 per day for Upper Mustang trekking
The government has fixed a daily trekking fee of USD 50 (or equivalent foreign currency) for foreigners visiting Upper Mustang. Government spokesperson and ICT Minister Jagdish Kharel said the Cabinet approved the revision to Schedule 12 of the Immigration Regulations, 1994. The new rule sets a flat per-day rate for international tourists entering the restricted region.
Surkhet–Dailekh 132 kV line delayed over pending forest clearance
Progress on the Surkhet–Dailekh 132 kV transmission line has slowed due to the lack of approval for tree felling. Project Chief Ravi Chaudhary said only 40% of the work has been completed since the Rs 800 million contract was awarded to Sigma Kathmandu in FY 2023/24. The project—requiring 102 angle towers over 32 km—was supposed to finish by mid-April 2026. More than 19,000 trees need to be removed, but the authorization remains stuck at the Ministry of Forests and Environment. As a result, the deadline has been extended by one year.
Tourism department issues 12-point directive to regulate casinos
The Department of Tourism has introduced a 12-point instruction for all casinos, mandating strict compliance with the Money Laundering Prevention Act. Casinos are barred from exchanging foreign currency without authorization from Nepal Rastra Bank and are prohibited from running online gaming platforms. They must also update customer identification and biometric data, store CCTV footage for at least six months, and deduct legally required taxes from player winnings before payout.
Chaudhary Group paid Rs 25.59 billion in taxes last fiscal year
The Chaudhary Group (CG) contributed Rs 25.59 billion in taxes in the last fiscal year—about 2.3% of Nepal’s total revenue. Managing Director Nirvana Chaudhary shared the information after meeting Finance Minister Rameshore Khanal, stating the group was proud to strengthen the national treasury despite challenges. The finance minister acknowledged CG’s sizable contribution to the country’s overall tax collection.
Biratnagar airport terminal 75% complete, set to open April 2026
Construction of the new Biratnagar Airport terminal has reached 75% progress, and operations are expected to begin by April 2026, even though the contractor’s deadline is January 14, 2026. Engineer Sanjiv Khadka of CAAN said mechanical and architectural tasks remain. The Rs 2.42 billion terminal covers 16,277 sq. meters and will be the largest domestic terminal in Nepal, with capacity for 550 passengers and 17 check-in counters. Once finished, the airport plans to extend its 1,500-meter runway by 270 meters.
Citizens Capital to manage Himalayan Energy’s IPO
Himalayan Energy has appointed Citizens Capital as the issue manager for its planned IPO of ordinary shares. The company is developing the 3 MW Kalinchok Hydropower Project in Kalinchok Rural Municipality-1, Dolakha. Its general assembly on October 27, 2024, approved issuing one million shares—20% of its Rs 500 million paid-up capital—to the public. The agreement was signed by Himalayan Energy CEO Laxmi Bhattarai and Citizens Capital CEO Sabir Bade Shrestha.
Daram Khola hydro project begins commercial generation after 17 years
The Daram Khola Hydroelectric Project in Galakot, Baglung, has finally entered commercial operation—nearly 17 years after planning began in FY 2008/09. Construction picked up momentum in FY 2020/21 after prolonged administrative and financial obstacles. Daram Khola Hydro Energy Pvt. Ltd. Chair Nar Bahadur Pun said commercial power supply started on November 16, 2025, with the plant currently producing 6.6 MW. The project, costing over Rs 2 billion, is connected to the Nepal Electricity Authority’s Harichaur substation 14 km away.
Lumbini’s capital spending remains low at 9.73% in first quarter
Lumbini Province spent only 9.73% of its capital budget in the first four months of FY 2025/26, amounting to Rs 2.28 billion out of Rs 23.47 billion allocated. Recurrent expenditure reached 14.28%, bringing total budget utilization to 11.53% of the Rs 38.91 billion budget. Much of the capital expenditure went toward previous liabilities. The Ministry of Health posted the highest capital spending at 63.33%, while several ministries—including Youth and Sports and Industry, Tourism, and Transport—reported zero capital use.
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