KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic and policy developments reflect a mix of cautious optimism and ongoing structural challenges. The appointment of Dr. Biswo Nath Poudel as Governor of Nepal Rastra Bank appears to have boosted investor confidence, leading to a significant rise in the NEPSE index.
However, this comes against a backdrop of rising public debt, which has climbed by nearly NPR 1.88 trillion in under a year, and growing concerns over money laundering activities, with a sharp 49% increase in suspicious transaction reports.
The government has begun key reforms, including plans to phase out small-scale projects from the national budget and privatize the iodized salt trade, signaling a shift toward decentralization and private sector engagement. Yet systemic inefficiencies remain—cold storage facilities remain underused, and Nepal’s insurance sector continues to function more as a savings vehicle than a risk management tool.
Meanwhile, regulatory bodies like SEBON face allegations of malpractice even as they take action, such as disqualifying IPO applicants with weak financials. Infrastructure progress, such as road upgrades and procurement of indigenous crops, show active development, while incidents like a paragliding pilot under the influence and a large-scale cooperative embezzlement highlight persistent governance and oversight issues.
Overall, the country is taking steps toward reform, but economic stability remains vulnerable to systemic inefficiencies and weak institutional trust.
Govt appoints Biswo Poudel as Governor of Nepal Rastra Bank
The government has appointed Dr. Biswo Nath Poudel as the Governor of Nepal Rastra Bank. Spokesperson and Minister for Communication, Information and Technology, Prithvi Subba Gurung, informed that Tuesday’s Cabinet meeting held at Singha Durbar appointed Poudel as the 18th Governor of Nepal Rastra Bank.
NEPSE sees significant rise
The Nepal Stock Exchange (NEPSE) experienced a notable increase on Tuesday. After a prolonged deadlock, the major ruling coalition partners reportedly reached an agreement on the appointment, leading to a market rally.
The NEPSE index surged by 49.09 points (1.86%), closing at 2,677. Despite the rise in the index, total turnover slightly decreased. Compared to the previous day’s transaction of Rs 7.35 billion, Tuesday’s turnover stood at Rs 7.31 billion.
Out of the traded companies, the value of 229 increased, 15 declined, and one remained unchanged. All sector indices posted gains, with the hotel and tourism sector seeing the highest growth, increasing by 3.42%.
Gold price holds steady
As per the Federation of Nepal Gold and Silver Traders Federation, the price of gold remained stable at NPR 184,800 per tola today—the same as Monday’s rate. On Sunday, the price was NPR 184,200, and it matched today’s rate on Friday. The highest recorded price so far this year was NPR 197,900 on Baishakh 9.
Public debt rises by nearly NPR 1.88 trillion by end of Baishakh
Nepal’s public debt surged by nearly NPR 1.88 trillion by the end of Baishakh in fiscal year 2081/82. The Ministry of Finance reports that total public debt stood at NPR 4.25 trillion at the end of Ashwin last year. As of Baishakh 31 this year, it had climbed to NPR 6.13 trillion, comprising both domestic and foreign loans incurred by various government entities.
Nepal sees sharp rise in money laundering concerns
Suspicious transactions and activities linked to money laundering saw a sharp rise of 49 percent in 2024, according to a new report by the Financial Intelligence Unit (FIU) under Nepal Rastra Bank. The FIU, in its annual newsletter released on Tuesday, revealed that a total of 9,304 Suspicious Transaction Reports (STRs) were filed throughout 2024.
Govt decides to hand over iodized salt trade to private sector
The government has decided to hand over the trade of iodized salt to the private sector. Last month, the Council of Ministers decided to implement the Iodized Salt (Production and Sale-Distribution) Act, 2055, starting from Shrawan 1, 2082, and a notification was published in the Gazette on 22 Baishakh, 2082.
Though the Salt Trading Corporation has been selling iodized salt for the last six decades, with the new act, other private industries besides Salt Trading will be allowed to supply and trade iodized salt. The act provides for granting licenses to all interested in salt trade.
Nepal’s Insurance sector remains savings-focused despite decades of operation
Even after decades, Nepal’s insurance sector has not moved beyond being savings and investment oriented. Though insurance’s primary objective is protection and risk management, in Nepal’s context, it remains limited to savings.
Insurance is often viewed as a plan where money is returned after a certain period rather than for risk protection. Attraction to purely risk-bearing insurance like term insurance is very low, according to statistics. The general public understands insurance as a savings mechanism, so companies only offer products accordingly.
Govt preparing to exclude small-scale projects from budget starting next fiscal year 2082/83
The Ministry of Finance’s budget formulation guidelines issued in Falgun 2081 for the upcoming fiscal year, and the government policy and program document presented by President Ramchandra Paudel in Parliament on 19 Baishakh, have prioritized cutting small-scale projects.
In fact, the government had already announced stopping small-scale projects from the previous fiscal year. Then Prime Minister Pushpa Kamal Dahal had decided in a cabinet meeting in Poush 2080 that small projects costing less than 30 million rupees would be allocated to provinces and local levels while making the budget for fiscal year 2081/82 on time.
SEBON requests factual proof from IPPAN regarding commission allegations
Following allegations of commission demands in IPO approvals, the Securities Board of Nepal (SEBON) has requested factual proof from the Independent Power Producers Association Nepal (IPPAN). The board has written a letter asking IPPAN to provide its institutional stance.
The letter states, “As accusations have been made mentioning names of IPPAN’s responsible officials including its chairman in relation to the board chairman, if there is any basis or factual details, please provide them and also share the official stance of the institution.”
Govt ministries directed to report progress on grey list exit measures
Relevant ministries and departments have been instructed to submit reports on the progress of activities aimed at removing Nepal from the ‘grey list’ related to money laundering to the Office of the Prime Minister and Council of Ministers.
In a secretary-level meeting held on Monday, it was decided that ministries responsible for implementing urgent corrective actions—namely the Ministry of Finance, Ministry of Culture, Tourism and Civil Aviation, Ministry of Land Management, Cooperatives and Poverty Alleviation, among others—must send detailed updates to the Prime Minister’s Office within 2082 B.S.
Govt signals strict enforcement of MRP labeling law
The government has indicated it will strictly enforce the legal provision requiring all domestically produced and imported goods to carry a Maximum Retail Price (MRP) label.
Even as traders protest the rule, the Department of Commerce, Supplies, and Consumer Protection has announced that it will step up monitoring and take further action against those selling goods without proper labeling. Business groups argue that the enforcement of MRP distorts market pricing and that penalties discourage entrepreneurs. They have been lobbying to halt MRP implementation.
Govt begins procurement of indigenous crops from all 753 local levels
The government has initiated the process to purchase indigenous crops from all 753 local units across the country. The Food Management and Trading Company Limited (formerly the Nepal Food Corporation), under the Ministry of Industry, Commerce, and Supplies, began this initiative in Falgun, coordinating with local governments nationwide.
So far, the company has signed agreements with 80 local units for the procurement of any type of locally available indigenous crops, according to the company’s Chief Executive Officer, Ramesh Acharya. “This is the major progress we have made over the past three months,” Acharya said. “This is not just about buying local crops—it also includes both
Cold storage facilities underutilized despite govt efforts to curb post-harvest losses
Although the government introduced cold storage systems to minimize post-harvest and storage losses of agricultural products, many of these facilities remain largely unused. Significant investments went into establishing these storages, yet some now lie idle or incomplete.
According to the 62nd Annual Report of the Auditor General, several cold storage units are only operating at about half of their capacity due to insufficient supply of produce, and some remain unfinished and abandoned. Access issues for farmers have also limited their use.
SEBON drops Kantipur Television Network from IPO process
The Securities Board of Nepal (SEBON) has disqualified Kantipur Television Network from participating in the IPO application process, citing its failure to meet the required net worth per share criteria. SEBON removed a total of 14 companies whose net worth per share was below NPR 90.
The move follows allegations from members of the Independent Power Producers’ Association Nepal (IPPAN) regarding demands for commissions in the IPO approval process.
Pokhara paragliding pilot caught flying under influence of drugs and alcohol
Safety concerns in Pokhara’s adventure tourism sector have been raised after a paragliding pilot was found flying under the influence of alcohol and drugs. In a surprise inspection conducted by Kaski District Police at the Mandredhunga paragliding take-off site, 39 pilots were tested for alcohol and 15 for drug use. One individual tested positive for both. Authorities have detained the pilot, and legal proceedings are underway.
Narayangadh-Butwal road construction reaches 66.50% completion
The construction of the Narayangadh-Butwal road has made considerable progress, reaching 66.50% physical completion, according to Information Officer Shiva Khanal. Out of the 113.53-kilometer stretch, 90.87 kilometers have been asphalted on one side. While bridges span 3.07 kilometers, 110.46 kilometers still require paving. Currently, 93.94 kilometers of the road are usable.
Road upgrade progresses on Mid-Hill Highway Pokhara section between Harichok and Yamdi Bridge
The road upgrade from Harichok to Yamdi Bridge on the Pokhara section of the Mid-Hill Highway is actively underway. The Mid-Hill Highway Project Office reported that one-sided asphalt work began in the second week of Baishakh and has reached up to the Jowari Checkpost. Nearly 1.5 kilometers of asphalt work has been completed so far.
Belibridge removed over Sun Koshi river
A surge in water levels in the Sun Koshi River prompted the removal of the belibridge at Foksingtar, disrupting the Gaighat-Diktel road section on the Sagarmatha Highway. RN Construction Pvt. Ltd. removed the temporary structure as a safety measure. The route is a vital connection between the Khotang hill district and the Terai region.
Bikas Hydropower Company Limited begins IPO issuance
Bikas Hydropower Company Limited has started offering its IPO to the public. The issuance is targeted at project-affected local residents and Nepalis working abroad. The company is offering 999,101 shares to locals and 354,550 shares to foreign-based citizens. Applications are open until Jestha 20.
Embezzlement of NPR 36.2 million uncovered at cooperative in Kavrepalanchok
Employees of the Community Saving and Credit Cooperative Limited in Panauti, Kavrepalanchok, have been found guilty of embezzling NPR 36.2 million. They manipulated the cooperative’s financial system to redirect funds. According to the institution, two employees transferred money from official accounts to personal ones, while a third misused loan funds for personal and family gain.
Jagadamba Motors to host ‘TVS Great Grand Exchange and Finance Fair’
Jagadamba Motors, the authorized distributor of TVS vehicles in Nepal, is set to organize the ‘TVS Great Grand Exchange and Finance Fair’ at Bhrikuti Mandap, Kathmandu, from Jestha 7 to 12. The event will allow customers to exchange old two-wheelers for new TVS models and enjoy various promotional offers and entertainment programs.
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