KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries. Nepal’s economic landscape shows a mix of strong financial momentum and underlying structural strain, with the stock market climbing and gold prices surging amid global uncertainty, while foreign investment commitments more than doubled, led by agriculture, ICT, and tourism.
At the same time, the Nepal Rastra Bank is moving to absorb excess liquidity as imports through Korala sharply rise and revenue collection at the border strengthens. Government initiatives—including the CAP Project to electrify industries and a major highway reconstruction effort—signal a push toward long-term sustainability and infrastructure resilience, while the e-passport deal helps ease an administrative bottleneck.
However, provincial data reveals weaker industrial capacity in Gandaki and Sudurpashchim, severe revenue underperformance in Lumbini, and acute livelihood challenges such as the paddy crisis in Kailali and mass unemployment from industrial disputes. Rising frequency-fee revenue, new IPO offerings, and regional labor trends—in India and South Korea—underscore both opportunities and pressures shaping Nepal’s economic and labor environment.
NEPSE climbs 39.92 points to close at 2,600.22
The Nepal Stock Exchange (NEPSE) index posted a strong gain on the first trading day of the week, rising by 39.92 points to reach 2,600.22. A total of 13,381,926 shares from 334 listed companies changed hands in 76,028 transactions, amounting to Rs 6.28 billion in turnover. All sectoral indices rose except for the mutual fund category.
Gold price surges to Rs 244,600 per tola
Gold prices in Nepal jumped on Sunday amid strong domestic demand and rising international rates. Fine gold now costs Rs 244,600 per tola, up Rs 2,900 from Friday’s price of Rs 241,700. Silver has also risen to Rs 3,135 per tola. Globally, gold was trading at USD 4,063 per ounce and silver at USD 51 per ounce, according to the Federation of Nepal Gold and Silver Dealers’ Association.
Nepal approves over Rs 36 billion in FDI commitments in four months
Foreign Direct Investment commitments worth more than Rs 36 billion have been approved for 382 projects during the first four months of fiscal year 2025/26—almost double last year’s figure of Rs 19 billion. The agriculture and forestry sector drew the highest investment value, receiving Rs 21.88 billion across 13 projects, while the ICT sector registered the most project approvals at 205. The tourism sector also attracted Rs 8.94 billion for 118 ventures.
NRB plans to absorb Rs 50 billion liquidity through 84-day instrument
Nepal Rastra Bank (NRB) will withdraw Rs 50 billion from the banking system on Sunday using an 84-day deposit collection instrument. The operation aims to curb the ongoing excess liquidity, which has surpassed Rs 7.4 trillion. The principal and interest will mature on February 17, 2027. Only licensed Class A, B, and C financial institutions are eligible to participate.
Korala border post expected to surpass Rs 4 billion revenue this month
Revenue collection at the Korala border point in Upper Mustang is projected to exceed Rs 4 billion by mid-December. The Mustang Customs Office reports that receipts had already reached Rs 3.83 billion by Friday. Since trade resumed on September 15, at least 1,731 electric vehicles and 1,030 cargo containers have entered Nepal, while 62 trucks carrying handicrafts and garments have gone to China. Total imports have crossed Rs 7.5 billion, and exports stand above Rs 85 million, demonstrating strong commercial activity at the Himalayan trade route.
Nepal introduces project to electrify industries, support net-zero 2045 pledge
The government has kicked off the Nepal Clean Air and Prosperity (CAP) Project, backed by the World Bank, to replace more than 1,000 industrial boilers that run on highly polluting fuels like coal and firewood. The initiative will provide financial and technical assistance to shift industries toward electric boilers or biomass-pellet technology. Costing Rs 109.9 million in its first phase, the project will also upgrade 30 air-quality monitoring stations and establish five new ones. The effort aligns with Nepal’s goal of achieving net-zero emissions by 2045.
E-passport distribution to return to normal after deal for 700,000 booklets
Nepal’s e-passport supply is set to stabilize after the Department of Passports signed an agreement with original supplier Idemia Identity and Security of France to procure 700,000 passports at the previous rate. The deal—facilitated by Prime Minister Sushila Karki—will allow the department to resume issuing about 6,500 passports daily, up from the restricted 1,000 per day during the shortage. The first shipment will arrive within three weeks, easing the backlog faced by the public.
Three BP Highway sections undergoing reconstruction under Rs 8.5 billion plan
Permanent restoration work has begun on three severely damaged sections of the BP Highway—hit hard by floods and landslides in 2023 and 2024. Around 30 kilometers of roadway in Kavrepalanchok and Sindhuli were affected. According to the Division Road Office, contracts have been awarded for rebuilding key segments, which are expected to be completed within two years. The highway will be upgraded to a two-lane standard, including expanding five bridges, under the Rs 8.5 billion reconstruction project.
Gandaki industrial output sees mixed growth as credit flow weakens
A Nepal Rastra Bank survey shows uneven production trends in Gandaki Province for fiscal year 2024/25. Noodle manufacturing rose sharply by 44.98%, followed by increases in beer (12.26%) and cigarettes (10.53%). However, overall industrial capacity utilization remained low at 39.19%. Credit flow to the sector dropped by nearly 10%, with only Rs 27.91 billion disbursed. The report attributes the weak performance to inadequate infrastructure and a shortage of skilled technical workers.
Lumbini collects only 9.25 percent of annual revenue target
Lumbini Province has fallen far behind its internal revenue target, collecting just 9.25% of its goal in the first four months of the fiscal year. The province generated Rs 451.5 million against a projected Rs 4.88 billion. Senior Account Controller Rabindra Aryal noted that this figure includes some non-revenue items such as grant returns. Major income sources include vehicle taxes, forest earnings, and driver’s license fees—though overall performance is drawing concern from economists.
Over 600 workers unemployed after plywood factory closure in Kohalpur
More than 600 workers have been left jobless following the shutdown of Yoyo Plywood Industries in Kohalpur-14, Banke, three months ago. Managing Director Rajeev Shrestha said continuous protests and disruptions by the All Nepal Industrial Workers Union—allegedly involving individuals who were not factory employees—forced the closure. The factory had been losing Rs 500,000 daily before operations ceased. The Labor and Employment Office confirmed that the company’s bank account was frozen after workers filed complaints about wages. The industrial dispute has resulted in widespread job losses.
Sudurpashchim industrial capacity dips to 34.47 percent
Sudurpashchim Province recorded a sharp decline in industrial capacity use, averaging only 34.47% in fiscal year 2024/25. Production of several goods dropped significantly, including wheat flour (down 65.09%), sugar (60.22%), and bricks (42.86%), primarily due to weakened demand. Despite low utilization, credit to the industrial sector increased by 4.37% to Rs 26.72 billion. Kailali district received the bulk of industrial loans—79.13%. New factories in the region have created 5,777 jobs.
Frequency fee collection rises 41.25% to Rs 4.95 billion
The government collected Rs 4.958 billion in frequency fees in fiscal year 2024/25, marking a sharp 41.25% rise from the Rs 3.509 billion gathered in 2022/23. Ten companies paid these fees to the Nepal Telecommunications Authority (NTA), with Nepal Telecom contributing Rs 2.7 billion and Ncell Axiata Rs 2.25 billion. The fees are charged for using the national radio frequency spectrum.
Solu Hydropower opens IPO for locals and overseas workers
Solu Hydropower Company has begun issuing its Initial Public Offering (IPO) on Sunday, targeting project-affected residents of Solukhumbu and Nepali migrant workers abroad. The company is releasing 20 million shares—20% of its total capital. Of these, 10 million shares are allocated for local residents and 1 million for workers employed overseas. The 82 MW Lower Solu Hydropower Project, a run-of-river plant, is already in commercial operation, with total project costs estimated at Rs 16.30 billion including interest.
Kailali farmers struggle to sell paddy as purchases stop, yields fall
Farmers in Kailali are facing difficulty selling their paddy after both the Food Management and Trading Company Limited and private traders halted procurement. The state-owned company stopped buying after surpassing its 35,000-quintal quota, purchasing 37,055.91 quintals in just two weeks. As a result, farmers cannot secure funds for wheat seeds and fertilizer. This comes amid a 7% decline in paddy output—roughly 22,186 metric tons—due to irregular rainfall, fertilizer scarcity, and power outages affecting irrigation. The situation poses a growing threat to farmers’ livelihoods.
New five-kilometer Rapti River boating route launched in Sauraha
A new five-kilometer boating route has opened on the Rapti River in Sauraha to draw more tourists. Stretching from Jindagani Ghat to Bhimpura Ghat on the eastern side of Chitwan National Park, the service is operated by Kinara Restaurant and Bar. The one-hour experience combines a jungle safari through the Kunaroj Buffer Zone with a river safari for wildlife viewing. Ten boats with a capacity of ten passengers each are currently operating, enabling 100 tourists per session, twice a day.
Ten Indian unions denounce new labor codes as harmful to workers
Ten major Indian trade unions have condemned the government’s newly enacted labor codes as a “deceptive fraud” against workers, calling for their repeal. Groups including the Centre of Indian Trade Unions staged demonstrations in Bhubaneswar on Saturday and plan wider protests on Wednesday. The new codes extend factory working hours and increase the threshold for requiring approval before layoffs from 100 to 300 workers. Meanwhile, the Bharatiya Mazdoor Sangh, a right-wing union, supports the reforms, arguing they strengthen worker protections.
Korean SMEs seek higher quota of foreign workers amid shortages
More than 60% of South Korean small and medium-sized enterprises depend on foreign labor due to acute domestic worker shortages, according to a Korea Employers Federation survey. Around 45.2% of respondents want the government to raise the annual foreign worker quota. This year’s EPS quota for 17 countries, including Nepal, is set at 130,000—35,000 fewer than last year. Still, Nepal remains a priority source country, with over 10,000 Nepali workers arriving in Korea so far this year. Many companies are urging a more flexible foreign-labor system aligned with economic needs.
NMB Bank announces 10% dividend proposal
NMB Bank’s Board of Directors has proposed a 10% dividend for shareholders, comprising 5% bonus shares and a 5% cash payout. The proposal is subject to approval from Nepal Rastra Bank and the bank’s annual general meeting. NMB shares are currently trading at Rs 237. The proposed dividend is higher than last year’s 8.25% cash dividend.
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