KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic indicators present a mixed picture, marked by short-term market stabilization alongside persistent structural pressures. The stock market’s modest rebound after a three-day slide and record-high gold prices suggest cautious investor sentiment and a continued preference for safe assets.
While exports have surged sharply, driven largely by soybean oil, rising imports have widened the trade deficit, underscoring Nepal’s ongoing dependence on external goods. Public debt continues to climb gradually, reflecting borrowing that slightly outpaces repayment.
Disruptions at northern borders have dampened EV imports and shifted demand toward fuel-powered vehicles, highlighting infrastructure and trade vulnerabilities. At the policy level, proposed flexible hydropower PPA rates signal efforts to attract private investment, while resumed sugar mill operations, agricultural procurement, and IPO and dividend announcements point to steady activity in real and financial sectors.
Overall, the data suggest an economy experiencing pockets of growth and recovery, but still constrained by trade imbalances, debt accumulation, and logistical bottlenecks.
NEPSE edges up 3.27 points after three-day decline
The stock market staged a mild recovery on Tuesday, snapping a three-session losing streak as the NEPSE index gained 3.27 points to close at 2,584. The index touched an intraday low of 2,569 around midday. Trading activity softened slightly, with turnover slipping to Rs 3.42 billion from Rs 3.51 billion a day earlier. Share prices increased for 134 companies, while 117 declined and eight remained unchanged. The Other group led the market with a 1.28 percent gain, followed by modest advances in hydropower, production and processing, and microfinance. SY Panel, Gurans Laghubitta, and Sayapatri Hydropower posted the strongest gains, whereas Citizen Life Insurance and CYC Laghubitta recorded notable losses.
Gold and silver prices climb to new highs
Gold prices hit a fresh record in the domestic market on Tuesday, rising by Rs 5,500 per tola to reach Rs 267,200, up from Rs 261,700 on Monday, according to the Federation of Gold and Silver Dealers’ Association. Silver prices also increased, gaining Rs 20 per tola to trade at Rs 4,255, compared to Rs 4,235 the previous day.
Public debt climbs to Rs 27.88 trillion in five months
Nepal’s public debt increased by Rs 114.48 billion in the first five months of the fiscal year, taking the total outstanding debt to Rs 27.88 trillion. Data from the Public Debt Management Office show that the government borrowed Rs 175.12 billion during the period, while Rs 167.01 billion was spent on servicing principal and interest. Internal debt rose to Rs 12.68 trillion, while external debt reached Rs 14.21 trillion, accounting for 45.66 percent of GDP.
Imports and trade deficit widen despite export growth
Imports also recorded a notable rise of 15.83 percent in the first five months of FY 2025/26, reaching Rs 766.19 billion compared to Rs 661.49 billion a year earlier. As a result, the trade deficit expanded by 10.52 percent to Rs 649.68 billion. Overall foreign trade grew by around 20 percent to Rs 882.70 billion, reflecting rising import demand despite strong export performance.
Exports jump sharply in first five months of FY 2025/26
Nepal’s exports surged by 58.17 percent during the first five months of the current fiscal year 2025/26, from mid-July to mid-December, according to the Department of Customs. Export earnings rose to Rs 116.51 billion, up from Rs 73.66 billion in the same period last year. The sharp increase was largely driven by soybean oil exports worth Rs 46.55 billion, even as raw soybean oil imports stood at Rs 4.70 trillion.
ERC proposes flexible power purchase rates for storage projects
The Electricity Regulatory Commission has proposed a new framework allowing flexible, project-specific power purchase agreement (PPA) rates for reservoir-based hydropower projects. Under the draft directive 2025, PPA rates would be determined based on factors such as depreciation, financing costs, operational expenses, returns, and royalties. Commission Chair Dr Ram Prasad Dhital said the proposal could help attract private investment in large projects like West Seti and Budhi Gandaki, moving away from the current uniform seasonal rates.
Birgunj customs records 17 percent rise in imports
Imports through the Birgunj Customs Office reached Rs 359 billion in the first five months of the current fiscal year, marking a 17 percent increase compared to the same period last year. Revenue collection also rose during the review period. Major imports included petroleum products, iron and iron goods, machinery, and soybean oil, according to customs officials.
Gandaki Province deregisters 10 inactive cooperatives
The Cooperative Registrar’s Office of Gandaki Province has canceled the registration of 10 cooperative institutions across Myagdi, Parbat, and Syangja districts for remaining inactive for two consecutive years. The decision was taken under the Gandaki Province Cooperative Act, 2019. Most of the deregistered cooperatives are based in Galyang Municipality, while others include institutions in Beni Municipality and Modi Rural Municipality. Despite deregistration, directors remain responsible for outstanding liabilities.
EV imports fall as northern border crossings stay shut
Imports of electric vehicles have dropped as key northern trade points with China remain mostly closed. Kerung and Korala are shut, while Tatopani is operating only partially. During the first five months of the current fiscal year, EV imports declined by 24.51 percent, with Nepal bringing in 4,286 vehicles worth Rs 10.44 billion, compared to 5,536 units worth Rs 13.83 billion in the same period last year. The Department of Customs said the majority of EVs were sourced from China.
Sugar mills resume crushing operations in Madhesh
Three sugar mills in Madhesh Province have restarted operations, including Indu Shankar Sugar Industry and Mahalaxmi Sugar Industry in Sarlahi, and Everest Sugar Mill in Mahottari. Indu Shankar has begun crushing sugarcane with a daily capacity of 35,000 quintals. However, Everest Sugar Mill is operating below capacity due to a shortage of raw materials, receiving only half of its daily requirement.
Kakarbhitta sees higher imports but lower exports
Imports through the Kakarbhitta border point totaled Rs 20.14 billion by mid-December, reflecting a 7.57 percent increase year-on-year, according to the Mechi Customs Office. In contrast, exports declined by 6.65 percent to Rs 10.72 billion. Total revenue collection from import-export activities during the period stood at Rs 6.82 billion.
Fuel vehicle imports surge amid EV supply constraints
With EV imports disrupted, imports of fuel-powered vehicles have increased sharply. Nepal imported 4,109 fuel-run vehicles in the first five months of the fiscal year, a 55 percent rise from 2,649 units a year earlier. The import value climbed by 42.67 percent to Rs 5.45 billion. MAW Vriddhi Motors CEO Prasanna Panta said floods delayed EV shipments via Kerung and Tatopani, but added that vehicle sales remain steady as imports gradually resume through Tatopani.
Salpa Development Bank to open IPO from December 31
Salpa Development Bank is set to issue its initial public offering starting December 31. The bank, established in 2012, has received approval to issue around 1.7 million shares worth Rs 172.3 million, equivalent to 33 percent of its paid-up capital. Applications for about 1.4 million shares will be accepted until January 4, 2026, at a face value of Rs 100 per share.
NLG Insurance announces 7 percent dividend
NLG Insurance has declared a total dividend of 7 percent for its shareholders, comprising 4 percent bonus shares and 3 percent cash. The company’s paid-up capital currently stands at Rs 2.56 billion. This marks an increase from last year’s distribution of 2.50 percent bonus shares and 0.13 percent cash dividend. The company’s shares are currently trading at around Rs 680 per unit.
FMTC completes paddy procurement in Banke
The Food Management and Trading Company’s Nepalgunj main branch has fulfilled its paddy procurement target for the year by purchasing 20,294.20 quintals of paddy from farmers in Banke district. The quota included 15,000 quintals of coarse paddy and 5,000 quintals of medium paddy, with procurement starting on November 9. Office chief Ramsharan Lamichhane said paddy worth about Rs 71 million was bought at the government’s minimum support price. Of the 721 registered farmers, 536 sold paddy, with a cap of 40 quintals per farmer.
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