KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic outlook remains mixed amid recent political unrest and natural disruptions. While foreign direct investment (FDI) commitments totaling Rs 33 billion signal continued investor interest—especially in agriculture and IT—the Gen-Z protests have triggered extensive damage, with insurance claims expected to surpass Rs 50 billion and fears of prolonged investor caution.
The government has responded by expediting Rs 9.8 billion in interest subsidies to stimulate concessional lending and fast-tracking Rs 20.7 billion in insurance payouts. At the same time, public frustration over inflation ahead of Dashain underscores governance gaps in market monitoring, even as infrastructure efforts such as the Nagdhunga tunnel opening and new hydropower additions attempt to offset structural challenges.
Suspension of SEBON’s pricing method amid investor backlash, delayed sovereign credit review, and labor migration during the festival season further highlight the fragility of both confidence and livelihoods. Despite progress in energy and agriculture, systemic vulnerabilities in governance, disaster response, and social protection continue to threaten Nepal’s economic resilience.
Nepal secures Rs 33 billion in FDI commitments for 236 projects
Nepal has secured foreign direct investment (FDI) pledges amounting to Rs 33.092 billion for 236 projects in the current fiscal year up to mid September, according to the Department of Industry. These include 225 small scale ventures, four medium scale, and seven large scale projects. While the Information Technology sector leads in numbers, with 120 projects worth about Rs 562.75 million, the agriculture sector leads in value, drawing in Rs 21.59 billion for nine projects.
Other investments include Rs 1.24 billion in manufacturing (12 projects), Rs 182.55 million in energy (one project), Rs 2.82 billion in services (15 projects), and Rs 6.69 billion in tourism (79 projects). Also during this period, 409 foreign investors, 60 representatives, and 107 dependents received visas. Total FDI commitments now stand at Rs 684.51 billion.
Govt releases Rs 9.8 billion to subsidise concessional loan interest
The Ministry of Finance has approved disbursement of Rs 9.8 billion to Nepal Rastra Bank to subsidise interest on concessional loans. Although slated for the second quarter of the current fiscal year, the funds will now be released in the first quarter. Subsidies will cover loans for agriculture, livestock, women entrepreneurs, startups, youth, and housing in disaster-affected areas, aiming to stimulate lending and support borrowers across the country.
Gen Z protests may trigger over Rs 50 billion in insurance claims
Destruction caused by the Gen Z protests has left private and corporate properties with severe damage, prompting the Nepal Insurers’ Association (NIA) to estimate that non life insurance claims could exceed Rs 50 billion—surpassing those after the 2015 earthquake. Major losses include damage to retail outlets like Bhatbhateni, the Hilton Hotel, cable car infrastructure, schools, homes, and banks. Insurers are raising concerns over minimal premiums for coverage against politically motivated violence, warning of broader economic consequences. The banking sector is also feeling the impact, and assessments of the total damage are being coordinated by insurers and Nepal Rastra Bank.
Insurers commit to fast track Rs 20.7 billion in Gen Z protest claims
The Nepal Insurers’ Association (NIA) has pledged to expedite the settlement of Rs 20.70 billion worth of claims stemming from the September 8–9 Gen Z protests. Nearly 1,984 claims, mostly from private property owners and businesses, have been filed. The NIA has urged claimants to submit required paperwork promptly, assuring that insurers are prepared to make quick payments.
SEBON suspends 15 minute weighted average closing price method after investor protests
Following intense public outcry, the Securities Board of Nepal (SEBON) has suspended use of the 15 minute weighted average method for determining NEPSE’s closing price. Investors had demanded the removal of this rule, which they claimed enabled artificial price manipulation in weaker companies. The market will now revert to using the last traded price as the official closing rate.
Landslides block Narayangadh Muglin road, govt mobilises task force ahead of Dashain
Persistent landslides have blocked the Tuin Khola Bridge section of the Narayangadh Muglin road since Friday evening. Stones continue to fall from about 70 meters above the road, with another major slide reported at 7:40 a.m. on Saturday. Three loaders and an excavator are working from both sides, and authorities expect the road to be cleared later today if no new slides occur. Minister for Physical Infrastructure and Transport Kulman Ghising has called a meeting of the relevant agencies. A task force has been formed to coordinate traffic management and road clearance during the upcoming Dashain and Tihar festivals, especially focusing on key highways affected by landslides.
Transport Minister directs 24 hour road management during Dashain
Minister Kulman Ghising, who oversees physical infrastructure, transport, and urban development, has instructed authorities to ensure round the clock management of key roads during Dashain. Following a landslide on the Narayangadh–Muglin road, the Department of Roads has been directed to maintain traffic flow, clear blockages quickly, provide regular public updates, enforce security, regulate heavy vehicles, and operate a focal control system to safeguard commuters.
Govt opens Nagdhunga tunnel for Dashain, tightens festival road safety
The government has decided to open the Nagdhunga tunnel for passenger vehicles exiting Kathmandu Valley on the eve of Bada Dashain, while public transport will be allowed to use the tunnel for entry after the festival. Minister Kulman Ghising directed real time road updates, 24 hour grievance redressal, and increased police patrols at the New Bus Park and along highways. Heavy trucks (12 wheels and above) will be prohibited on the Daunne section during Dashain. The Department of Roads is tasked with maintaining highways, clearing landslides, and keeping major routes—including Narayangadh Muglin and the Tatopani checkpoint—open throughout the festival.
Kisantari substation in Gulmi begins operation after nine year wait
The 33/11 kV Kisantari substation in Malika Rural Municipality 8, Gulmi, has formally started operating after nine years since its construction agreement. Built by MSA2Jet Infrastructure Pvt. Ltd. at a cost of Rs 105 million, the 3 MVA facility is expected to greatly improve electricity supply across Malika, Madane, and Dhurkot. Previously, long 11 kV feeders caused voltage drops and frequent outages during faults. Now linked to a 33 kV transmission line, the new substation will cut transmission losses and improve reliability. Residents have welcomed the upgrade, though areas such as ISMA and Musikot still face supply issues. Authorities say these will be resolved once the planned 132 kV substation in Paudi Arewa is completed.
Dharan sub metropolitan council approves Rs 220.74 crore budget for FY 2082/83
Dharan Sub Metropolitan City has approved a budget of Rs 220.74 crore for fiscal year 2082/83. The budget, presented by Deputy Mayor Indra Vikram Beghale, draws on internal revenue, grants from federal and provincial governments, road board funds, and leftover balances. Major allocations are Rs 66.94 crore for urban planning and infrastructure, Rs 46.85 crore for education and youth, Rs 6.99 crore for health, and Rs 4.86 crore for social development. Priority sectors include infrastructure, agriculture, and disaster management.
Finance minister visits CG Group factory damaged in Gen Z protests
Finance Minister Rameshwar Khanal and FNCCI President Chandra Dhakal inspected CG Group’s Satungal factory, which suffered extensive damage during the Gen Z protests on September 23–24. Preliminary estimates put the losses at about Rs 500 crore, covering factories, machinery, vehicles, servers, and showrooms. The CG Group has called on the government to ensure industrial security, speed up insurance payouts, provide loan relief, and offer tax and duty concessions to support recovery.
Nepal delays second sovereign credit rating due to protests
Nepal’s plan to undergo a second sovereign credit rating review by Fitch has been postponed indefinitely following political instability and the Gen Z protests. The Ministry of Finance confirmed that Fitch had planned a country visit for September 8–9, supported by Standard Chartered Bank, but cancelled amid nationwide unrest. Officials worry that a rating issued during this time could be unfavorable, damaging Nepal’s international credibility. Nepal currently holds a “BB-” rating. Authorities intend to reschedule the assessment after political and economic stability returns to safeguard investor confidence and borrowing prospects.
World Bank warns Nepal risks losing demographic dividend
A new World Bank report titled Nepal Human Capital Review: Nurturing Nepali Talent to Foster Economic Growth warns that children born in Nepal today may achieve only 50% of their potential productivity—dropping to 18% when actual labor conditions are considered. The report cites poor education, weak healthcare, and limited formal job options, especially for women, as major challenges. Migration helps reduce poverty but results in a loss of skilled human capital. The report calls for depoliticizing education and healthcare, expanding access to finance and training for small enterprises, and boosting public investment. Without urgent reforms, Nepal risks squandering its demographic advantage.
Amid Dashain, far-west Nepalis head to India for work
While most Nepalis travel home for Bada Dashain, a different trend is taking shape in the far west. Many from Sudurpaschim and Karnali provinces are instead heading to India for seasonal work, driven by poverty and lack of local jobs. Migrants are traveling to states like Himachal Pradesh, often bringing family members—including schoolchildren—for temporary work. Many hope to return home by Tihar. The movement highlights the economic pressures forcing people to forgo major festivals in search of income.
107.3 MW from Rahughat projects added to national grid
Three private-sector hydropower projects in Myagdi’s Raghuganga Rural Municipality have collectively added 107.3 MW of electricity to the national grid. These include the 48.5 MW Upper Rahughat project by Tundi Power, the 37.5 MW Chimkhola-Rahughat-Mangale project, and the 21.3 MW Thulokhola project. While Upper Rahughat has begun trial production, the other two are already in commercial operation. Two more projects—40 MW Rahughat and 22.5 MW Upper Thulokhola—are nearing completion. Local officials say the new power generation is boosting employment and economic activity while generating revenue for the municipality. Power is being transmitted via the Rahughat switchyard in Tilkenichour.
Price hikes frustrate Dashain shoppers as fair-price shops fall short
Shoppers in Kathmandu’s key markets—such as Asan, Indrachowk, Mahabouddha, and New Road—are struggling with sharp price increases on clothes, utensils, and food items ahead of Dashain. Many blame the disruptions at the Tatopani and Rasuwagadhi border crossings with China. Consumers also accuse retailers of issuing unregistered bills lacking VAT and PAN. In response, the government opened fair-price shops on September 15 via the Food Management and Trade Company Limited. These outlets offer Rs 5–10 discounts per kilo on staples like rice, oil, lentils, tea, and spices. They will operate until Chhath, but citizens are demanding a wider reach—with at least one shop per ward.
Burned vehicles from Singha Durbar protests being managed
Vehicles damaged during the recent Gen-Z protests in the Singha Durbar area are now being relocated and managed, according to the Ministry of Physical Infrastructure and Transport. The torched vehicles are being moved to an open area within the Parliament compound. Repairs and clean-up operations have also begun. Minister Kulman Ghising previously ordered authorities to take swift action to manage vandalized government assets and restore normalcy in the administrative area following the unrest.
Sunsari expects good rice harvest despite late planting
Rice farmers in Sunsari district are anticipating strong yields this season, despite delays in planting caused by a weak monsoon. According to the Agricultural Knowledge Centre, the use of boring machines and irrigation canals helped ensure crop health. Rice has been sown on over 48,000 hectares using high-yield varieties like Swarna Sub 1, Sawan Mansuli Sub 1, and Gangasagar. Experts report fewer pest infestations and disease outbreaks. Local farmers and technicians agree that the late planting had little impact, raising hopes for a successful harvest in one of Nepal’s key rice-producing regions.
Comment