KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s current economic landscape reflects a complex interplay of recovery signals, ongoing vulnerabilities, and shifting investor and consumer sentiment. The stock market has regained momentum after a previous downturn, but declining trading volume and a surge in gold prices suggest cautious investor behavior.
While foreign investment approvals have significantly increased and financial system deposits have hit record highs, these gains contrast with underlying concerns such as fallout from the Gen Z protests, which impacted both public confidence and GDP. The private sector faces calls for reform amid these challenges, even as government and industry work together on recovery plans.
Simultaneously, tourism is experiencing mixed trends—with some regions like Ilam recovering, while broader cancellations persist due to safety concerns. Key sectors like jute manufacturing and energy infrastructure also face supply disruptions and modernization pressures, respectively. Amid these developments, the resumption of international flights, IPO launches, and growing imports highlight a cautious but ongoing push toward normalization and growth.
Stock market rebounds after two-day surge
Following two consecutive days of strong gains, the stock market has now bounced back from the previous downturn. On Tuesday, the second trading day of the week, the NEPSE index climbed by 58.63 points to close at 2,682.25. This follows Sunday’s significant rise of 111.70 points, which came after a sharp 160.33-point drop last Thursday due to a market-triggered circuit break. Despite the index increase, trading volume declined, falling from over Rs 9 billion on Sunday to Rs 5.29 billion on Tuesday.
Gold prices jump in domestic market
Gold prices surged on Tuesday in Nepal’s local market. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold rose by Rs 3,900 per tola, from Rs 217,800 on Monday to Rs 221,700 on Tuesday. Silver prices also increased, climbing by Rs 30 per tola.
Foreign investment approvals triple early in the fiscal year
In the first two months of the 2025/26 fiscal year, foreign investment approvals have risen sharply. Data from the Department of Industry shows that Rs 33.09 billion in foreign investments were approved during this period—almost three times higher than the Rs 12 billion approved during the same timeframe last year. Of the total, Rs 1.36 billion came through the automatic route, while Rs 31.72 billion was approved via regular channels.
Financial system deposits hit all-time high
Bank and financial institution deposits have reached a historic peak, now totaling 120 percent of Nepal’s GDP. This surge is largely linked to the ongoing economic slowdown and a drop in overall demand. As reported by Nepal Rastra Bank, total deposits in the financial system have reached Rs 7.323 trillion. In comparison, Nepal’s GDP at consumer prices for the last fiscal year stood at Rs 6.107 trillion, according to the National Statistics Office.
Small insurance claims to be cleared by Tihar
According to Nepal Insurers Association president Birendra Baidwar, smaller insurance claims will be settled before Tihar. Speaking at a NAFIJ-hosted discussion on economic recovery, he stated that the recent Jenji protests caused private sector losses nearing Rs 80 billion. Insurance companies have received small claims worth Rs 22.25 billion up to September 22, which are expected to be paid by the festival.
Gen Z protests erode investor confidence
Investor sentiment has taken a hit due to recent Gen Z protests, says Birendra Raj Pandey, president of the Confederation of Nepalese Industries (CNI). During the economic recovery discussion organized by NAFIJ, Pandey noted that both public and private properties suffered damage. He estimated that the protests led to a 5 percent GDP loss and called for government action to ensure investment security and provide financial and monetary aid for recovery.
Public-private partnership focuses on economic revival
Tanka Prasad Pandey, spokesperson for the Ministry of Finance, announced that the government is working closely with the private sector to support economic recovery. At a program hosted by the Nepal Economic Journalists Association, Pandey emphasized that the collaboration focuses on stimulus measures, security, and governance. He stressed that promoting Nepal as a secure destination for investment remains a key objective.
Tourist cancellations surge amid safety concerns
Tourist bookings have dropped sharply as safety concerns and misinformation spread. Typically, Nepal sees around 100,000 tourists per month during September and October. Until September 8, about 3,000 tourists were arriving daily, but that number has now dropped to 1,000. Tour operators report that group and cultural tour bookings—especially long itineraries—have seen major cancellations. In contrast, adventure tourism remains relatively stable.
Jute industry struggles amid Bangladesh export restrictions
Nepal’s jute industry is facing serious challenges following Bangladesh’s unofficial restriction on raw jute exports. Although no formal announcement has been made, Nepali manufacturers report difficulties sourcing raw jute from Bangladesh. These industries, which annually export over Rs 8 billion in processed jute products to India, depend heavily on raw materials from both Bangladesh and India.
Private sector urged to reform after protests
Sagar Pandey, president of the Trekking Agencies’ Association of Nepal (TAAN), stated that the private sector must also undergo reforms in the aftermath of the Jenji protests. Speaking at the “Next Steps for Economic Recovery” event organized by NAFIJ, he emphasized that the protests highlighted the need for improvements within the private sector. He urged the government to create a recovery plan, starting with boosting tourism activity.
Petroleum imports via Birgunj see growth
Petroleum imports through the Birgunj customs point reached Rs 26.33 billion in the first two months of the 2025/26 fiscal year. Imports included diesel, petrol, LPG, aviation fuel, and furnace oil. Compared to the same period last year, imports rose by Rs 1.76 billion, adding Rs 1.29 billion in customs revenue, according to Birgunj Customs chief Bishnu Prasad Gyawali.
Buddha Air to restart flights to Kolkata
Buddha Air is resuming its Kathmandu–Kolkata route after a six-year gap. The airline previously halted operations just six months after launching the route. Starting from Kartik, Buddha Air will operate three round-trip flights per week—on Sundays, Tuesdays, and Thursdays. The flight duration is around 1.5 hours, and ticket bookings have already begun.
Goat supply begins in valley ahead of Dashain
Ahead of the Dashain festival, the Nepal Commercial Goat Farmers’ Association has begun transporting goats to the Kathmandu Valley. Around 60,000 goats worth approximately Rs 1.05 billion are being brought in from various districts. The government’s Food Corporation is not selling goats this year due to political instability and road disruptions. Despite landslides and floods delaying transportation, supply efforts are underway.
24 climbers receive permits for Dhaulagiri expedition
For the autumn 2025 season, 24 climbers have received permits to summit Dhaulagiri, the world’s seventh-highest mountain (8,167 meters) in Myagdi district. The Department of Tourism reported collecting Rs 5.071 million in permit fees. Foreign climbers must pay USD 900 per person for expeditions on eight-thousanders other than Everest.
Tourism recovers in Ilam following Gen Z protests
Tourist numbers are bouncing back in Ilam after the area emptied during the Gen Z protests on September 8–9. Sites like Kanyam are once again seeing visitors, with a return of both domestic and international tourists. According to Rudra Ghimire, president of the Antu Tourism Business Association, hotels, cottages, and homestays have seen improved occupancy.
Kodari Highway reopens, restoring China trade link
The Kodari Highway, which connects to China via the Tatopani border, reopened on Monday afternoon. This has enabled the movement of containers carrying goods for the upcoming Dashain festival. Rajendra Chudal, chief of the Tatopani Customs Office, said trucks stuck on the Nepali side are now crossing, and cargo loading on the Chinese side will begin shortly.
Kulekhani hydropower units shut for automation upgrade
Kulekhani Hydropower Plants 1 and 2 have temporarily ceased operations to install automation systems. Since electricity demand is low during the monsoon, the shutdown will not affect supply. Project chief Taradatt Bhatta said the units, built over 40 years ago, will soon switch from manual to automated operation for both generation and shutdown.
Chitwan business complex launches hotel and mall
The newly opened 11-story Chitwan Business Complex (CBC) now houses a hotel and a shopping center. Operated by CBC in collaboration with Lads Hospitality, the hotel offers 58 rooms. The complex also includes the 38th Salesberry store in Nepal and spans 107,000 square feet, including two underground parking levels.
SY Panel Nepal issues IPO for locals and NRNs
SY Panel Nepal Ltd has launched an IPO targeting local residents and Non-Resident Nepalis (NRNs). The offering includes 261,627 shares for locals and 497,092 shares for NRNs. The company plans to offer 40 percent of its total capital—equivalent to 5,232,548 shares—through this public issue. The company’s total issued capital is Rs 130 million.
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