KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The developments reflect a mixed but revealing picture of Nepal’s current economic and governance landscape, marked by selective recovery, structural bottlenecks, and post-protest aftershocks. While the easing of land-use rules has triggered a sharp rebound in real estate transactions and falling gold prices have offered short-term relief to consumers, broader investment sentiment remains constrained by regulatory delays, political uncertainty, and governance gaps.
Stalled tourism IPOs, delayed implementation of the Asset Management Company Act, and investor frustration in the hydropower sector point to institutional weaknesses that continue to dampen private sector confidence. At the same time, sluggish capital expenditure in provinces like Sudurpaschim and Karnali underscores persistent execution failures in sub-national governments, worsened by disruptions from Gen Z protests.
Policy responses—such as revised grant procedures, digital toll collection plans, relief support for protest victims, and targeted urban development funding—signal attempts to restore momentum, but uneven implementation and coordination challenges remain evident. Overall, the data suggest an economy showing pockets of resilience but still grappling with governance, regulatory clarity, and political stability needed for sustained growth.
Gold price falls by Rs 2,000 per tola
The Federation of Nepal Gold and Silver Dealers’ Association reported a sharp decline in precious metal prices on Friday. Gold prices dropped by Rs 2,000 to trade at Rs 258,400 per tola, while silver prices fell by Rs 75 to Rs 4,005 per tola. In the international market, gold was priced at USD 4,324 per ounce. Traders said the domestic price adjustment reflects fluctuations in the global bullion market and offers some relief to consumers after a period of sustained price volatility.
National Planning Commission revises grant procedures
The National Planning Commission has approved the first amendment to the procedures governing Federal Special and Complementary Grants. Following the revision, provincial and local governments have been invited to submit project proposals through the electronic reporting system by February 12, 2026. The amendment aims to promote balanced social, economic, and infrastructure development while strengthening sub-national governance under the Intergovernmental Fiscal Arrangement Act, 2017. Projects must be completed within three years. Under the revised rules, special grants for local levels range from Rs 2.5 million to Rs 50 million, while provincial projects may receive between Rs 50 million and Rs 100 million.
Real estate revenue jumps to Rs 4.848 billion
The real estate sector recorded a strong recovery after the government relaxed rules on land plotting, generating Rs 4.848 billion in revenue between November 17 and December 15. According to the Department of Land Management and Archive, 51,632 land transactions were completed during this period, a notable rise compared to the Rs 2.74 billion collected from October 18 to November 16. The rebound followed the implementation of the Third Amendment to the Land Use Regulation 2025, which allowed land fragmentation in more than 500 local units. While transaction volumes have increased significantly, experts say further easing of bank lending policies could potentially double current activity levels.
Government announces monthly support for Gen Z protest victims
The government has introduced a relief mechanism to provide monthly allowances to individuals injured during the Gen Z protests held on September 8 and 9. According to the Ministry of Health, victims have been classified into four categories. Those with moderate injuries will receive Rs 4,000 per month, seriously injured individuals Rs 9,000, and those with severe injuries Rs 18,000, while minor injuries do not qualify for cash support. So far, 183 individuals from Kathmandu, Kaski, and Chitwan have been verified, including 18 in the most severe category. Nationwide, 2,522 injuries were reported across 74 health facilities.
Delays at SEBON stall Rs 2.30 billion tourism IPOs
Initial Public Offerings worth Rs 2.30 billion from seven hotel and tourism-related companies remain on hold due to delays at the Securities Board of Nepal (SEBON). Companies such as Apex Hospitality, Hotel Forest Inn, and Moulakalika Cable Car have applied to issue a combined total of over 23 million shares, but approval has yet to be granted. At present, only seven tourism companies are listed on the Nepal Stock Exchange. Market analysts note that investor appetite is strong but stress the need for clear regulatory standards on which categories of hotels should be allowed to go public. Among upcoming ventures, Barahi Sedi Limited is constructing a five-star hotel in Pokhara with an investment of Rs 6 billion.
Energy investors raise concerns over demands for free equity
Energy sector investors have voiced growing frustration over demands from local communities and Gen Z groups for free shares and additional royalties in hydropower projects. Despite fulfilling legal obligations, including providing 10 percent local shares and royalty payments, developers have faced repeated disruptions. IPPAN President Ganesh Karki said such illegal demands are discouraging private investment in the sector. He cited the recent case of the 45 MW Bhote Koshi project, which was halted for 32 days until an agreement was reached to provide shares at a par value of Rs 100. IPPAN has urged the government to ensure security and law enforcement at hydropower sites to safeguard national energy infrastructure.
Asset management company act faces delay amid political uncertainty
Nepal Rastra Bank has completed a draft of the Asset Management Company (AMC) Act, intended to address the growing volume of non-performing assets in the banking sector. The draft is ready for approval by the NRB board before being forwarded to the Ministry of Finance and Parliament. However, political uncertainty following the dissolution of Parliament after Gen Z protests and the announcement of elections on March 5, 2026, has raised concerns over delays. The AMC, long proposed to manage bad loans now averaging over 5 percent, may not be implemented before the next fiscal year. The company is expected to help banks offload unsold assets and improve liquidity once established.
Disaster-related insurance payouts reach Rs 111.5 million
The Nepal Insurance Authority has paid out Rs 111.5 million in claims related to floods and landslides that have occurred since July 2. Of the 790 preliminary claims filed, totaling Rs 4.182 billion, only 96 have been settled so far. Property insurance accounts for the largest share, with claims worth Rs 3.583 billion, of which Rs 96.4 million has been paid. Additional payouts include Rs 12 million for private motor insurance and Rs 1.9 million for agricultural and crop insurance. The authority said the remaining claims are still under assessment.
Digital toll gates planned for 22 national highways
Road Board Nepal has begun preparations to install digital toll gates on 22 national highways to modernize road fee collection. The move aims to replace manual systems that are prone to corruption and safety risks. A digital toll gate is already in operation on the Bhairahawa–Bhumahi road, charging Rs 30 for heavy vehicles and Rs 20 for smaller ones. Each automated gate costs around Rs 50 million. Planned locations include the Nagdhunga Tunnel, Narayanghat–Butwal, and Muglin–Pokhara corridors. Revenue collected will be deposited directly into the board’s central account for road maintenance and bridge repairs.
Sudurpaschim capital spending falls sharply to Rs 430.1 million
Capital expenditure in Sudurpaschim Province has dropped significantly, reaching only Rs 430.1 million in the first five months of fiscal year 2025/26. This represents just 2 percent of the province’s Rs 19.83 billion capital budget, down from 7 percent during the same period last year. Spending delays followed damage to ministry offices and documents during the Gen Z protests, which disrupted budget approvals. Although infrastructure tenders are now underway, total provincial expenditure stands at only Rs 2.536 billion.
Air pollution drains 10 percent of South Asia’s GDP annually
A World Bank report titled A Breath of Change has revealed that air pollution causes around one million premature deaths each year in South Asia, affecting nearly one billion people. The report estimates economic losses equivalent to 10 percent of the region’s GDP due to polluted air. Major contributors include the use of solid fuels for cooking, unfiltered industrial emissions, and crop residue burning. The report calls on Nepal, India, Pakistan, Bhutan, and Bangladesh to collaborate on cleaner technologies such as electric cooking and improved waste management. World Bank economist Martin Heger stressed that regional coordination and reliable data are essential to saving lives and sustaining economic growth.
Karnali Province records low capital expenditure at 3.26 percent
The Karnali Province government has also struggled with slow spending following the Gen Z protests, utilizing only 7.2 percent of its Rs 32.99 billion budget in the first five months of the fiscal year. Capital expenditure remains particularly weak at Rs 651.1 million, or 3.26 percent. Officials attribute the slowdown to coordination issues with the federal government and declining staff morale. The situation has been compounded by damage to 38 buildings during protests, leaving the provincial assembly without a functioning meeting hall for more than four months.
Three-member panel formed to investigate Reliance Spinning Mills IPO
The Securities Board of Nepal (SEBON) has constituted a three-member committee to examine issues related to the Initial Public Offering of Reliance Spinning Mills, following instructions from the Ministry of Finance. The committee is headed by Binod Kumar Ghimire and includes members Anand Raj Sharma Wagle and Pitambar Bhandari. Despite the investigation prompted by media reports, SEBON spokesperson Tolakanta Neupane confirmed that the IPO, scheduled to open on Sunday, will proceed as planned. He explained that the board is unable to suspend the issuance at this stage due to a court order requiring the continuation of the process.
Karnali allocates Rs 160 million to upgrade Dunai Bazaar
The Karnali Province government has earmarked Rs 160 million to develop Dunai, the district headquarters of Dolpa, into a planned urban center. The project focuses on riverbank protection, drainage improvement, and road expansion. For the current fiscal year, Rs 40 million has been released to upgrade internal roads and connect a newly built Bailey bridge to the local hospital. Plans also include widening narrow access routes to the bus park and helipad and preventing sewage from flowing directly into the Bheri River, a long-standing local concern.
Sagarmatha Lumbini Insurance proposes 15 percent cash dividend
Sagarmatha Lumbini Insurance has proposed a 15 percent cash dividend for its shareholders based on its paid-up capital. The decision was made by the company’s board of directors following a review of its financial performance for the last fiscal year. The proposed dividend is subject to approval by the Nepal Insurance Authority and must be endorsed at the company’s forthcoming Annual General Meeting before distribution.
India–Nepal tourism meet in Pokhara highlights cross-border travel circuits
Pokhara hosted the second edition of the India–Nepal Tourism Meet on Thursday, with discussions centered on enhancing tourism cooperation between India’s Uttar Pradesh and Nepal’s Gandaki Province. Gandaki Chief Minister Surendra Raj Pandey identified Pokhara and Muktinath as key attractions for Indian tourists. Speaking at the event, Indian Embassy Deputy Chief of Mission Rakesh Pandey noted that India continues to be Nepal’s largest tourist source market and underlined the importance of promoting shared religious and cultural tourism circuits. The meet featured a business session attended by around 70 delegates, where opportunities in wildlife tourism and adventure travel were discussed. Organizers said the collaboration aims to increase land-route tourism by capitalizing on expanding connectivity between the two neighboring regions.
Suryodaya Womi Microfinance decides against dividend payout
Suryodaya Womi Microfinance Financial Institution has announced that it will not distribute dividends to shareholders from last fiscal year’s profits. The decision was taken during a meeting of the board of directors. Following the resolution, the institution has forwarded its financial statements to Nepal Rastra Bank for final approval. The move reflects a cautious financial strategy as microfinance institutions navigate regulatory changes and economic pressures. As a result, shareholders will not receive either cash dividends or bonus shares for the period.
Prime Commercial Bank announces Rs 1.63 billion dividend
Prime Commercial Bank has declared an 8.421 percent dividend for its shareholders from the profits of the previous fiscal year. According to a decision by the board of directors, shareholders will receive an 8 percent bonus share along with a 0.421 percent cash dividend to cover tax obligations. The total dividend distribution amounts to Rs 1.63 billion. The proposal will require approval at the bank’s upcoming Annual General Meeting. Currently, Prime Commercial Bank shares are trading at Rs 248.40 per unit.
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