KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic and policy landscape continues to present a mixed picture marked by cautious financial maneuvers, regulatory adjustments, and localized development disparities.
While the NEPSE index remained largely flat under selling pressure and gold prices fell sharply, the central bank’s extension for repaying excess working capital loans indicates regulatory leniency to support liquidity.
On the trade front, despite rising volumes, Nepal’s deficit with Bangladesh and Bhutan continues to widen due to weak export growth. Budget allocations across local and provincial governments reflect both progress and controversy—most local bodies presented their budgets, yet high-profile favoritism in Gandaki and Koshi Provinces has raised concerns about governance and equity.
Meanwhile, infrastructure projects like the Mahakali Corridor and Bharatpur’s electrification efforts face delays due to budgetary and seasonal constraints.
Encouragingly, orthodox tea exports surged by over 40%, tourist numbers rose at Annapurna Base Camp, and digital financial innovation advanced with Khalti’s introduction of Nepal’s first recurring deposit feature, signaling positive momentum in selective sectors.
NEPSE index slightly declines amid selling pressure
On Tuesday, the third trading day of the week, the Nepal Stock Exchange (NEPSE) index edged down slightly by 0.22 points to close at 2,600.53. The market faced stronger selling pressure throughout the day. A total of 13.8 million shares from 249 companies—comprising 316 scrips—were traded. Among these, 107 companies gained value, while 142 saw their share prices slide. Total turnover for the trading session amounted to Rs 5.76 billion.
Gold price plunges by Rs 1,700 per tola in a day
Gold prices in Nepal fell sharply on Tuesday, dropping by Rs 1,700 per tola to settle at Rs 193,500, down from Monday’s Rs 195,200, according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver also saw a decline of Rs 10 per tola.
NRB extends deadline for repaying excess working capital loans by two years
The Nepal Rastra Bank (NRB) has extended the deadline for repaying working capital loans that exceed regulatory limits. An amendment issued on Monday now allows borrowers until mid-July 2027 to clear their outstanding excess loans—an extension from the previous mid-July 2025 deadline.
Nepal’s trade deficit with Bangladesh and Bhutan widens despite growing trade
Nepal’s trade deficit with Bangladesh and Bhutan has expanded, despite an increase in bilateral trade volumes. Due to stagnant export growth, Nepal incurred a deficit of Rs 3.91 billion with Bangladesh and Rs 1.28 billion with Bhutan in the first eleven months of the current fiscal year.
Govt revises budget clause amid ‘take and pay’ dispute in hydropower
Addressing controversy around the ‘take and pay’ mechanism in hydropower projects, Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel amended Clause 227 of the national budget during Tuesday’s House of Representatives session. The revised clause stipulates that Power Purchase Agreements (PPAs) may only be signed with projects whose energy offtake or export is verifiable through a financial risk assessment, and that the Nepal Electricity Authority (NEA) can assume responsibility for payment.
Most local governments present budgets; KMC yet to call assembly
On Tuesday, the majority of local governments across Nepal presented their fiscal year budgets during municipal and village assembly meetings. While some had already complied with the Intergovernmental Fiscal Arrangement Act, most did so today. However, Kathmandu Metropolitan City (KMC) has yet to convene its assembly or present its draft budget. “There has been no preparation yet. The budget will not be presented today,” said KMC spokesperson Navin Manandhar.
Securities Board expands investment scope for investment companies
The Securities Board of Nepal (SEBON) has broadened the investment capabilities of investment companies. Previously restricted to promoter shares in energy, transport, and communication sectors, these firms can now also invest in primary share issues and trade shares in the secondary market—while still being limited in promoter-share investments in specified industries.
Rs 18.04 billion worth of petroleum imports via Kakarbhitta in 11 months
During the first eleven months of the current fiscal year 2024/25, Nepal imported petroleum products valued at Rs 18.04 billion through the Kakarbhitta border. The imports included petrol, diesel, LPG, aviation turbine fuel (ATF), and kerosene.
Gandaki chief minister criticized for channeling budget and aid to his constituency
Gandaki Province Chief Minister Surendra Raj Pandey faces criticism for disproportionately directing budgetary funds and aid to his home constituency, Gorkha-2(A). Accusations include allocating both financial assistance intended for the poor and severely ill, as well as provincial budget resources, primarily to his own district.
Koshi Province budget shows favoritism: ministers prioritise own districts
In drafting the FY 2025/26 budget, coalition ministers in Koshi Province have been accused of favoring projects in their own home districts, neglecting broader provincial interests. Critics assert that this bias is evident in both project selection and fund allocation.
Jagdulla hydropower project contract halted after PAC objection
The contract procedure for the Jagdulla Hydropower Project has been suspended following a June 6 directive by the House’s Public Accounts Committee (PAC). The PAC demanded verification regarding allegations that some bidding contractors submitted forged documents to participate in the project.
Tourist arrivals increase at Annapurna base camp
Annapurna Base Camp, located in Annapurna Rural Municipality–4 (Narchyang, Myagdi), has seen a rise in tourist numbers due to improved hotel infrastructure and trekking route management. The base camp on Annapurna I—first summited on June 3, 1950, by Maurice Herzog, Louis Lachenal, and two Nepali Sherpas—has re-emerged as a sought-after destination for both Nepali and foreign trekkers.
Provincial governments struggle with budgeting and staffing issues
Provincial governments continue to face similar challenges related to budget formulation, tax collection, staff recruitment, and unplanned infrastructure development. In a dialogue hosted by the Center for Federalism and Localization, provincial finance secretaries said the replication of federal structures at the provincial level has led to inefficiencies and increased recurrent expenses.
Underground electrification work halted in Bharatpur due to monsoon
Underground electrification efforts in Bharatpur Metropolitan City have been suspended for three months. The Department of Roads has restricted road excavation during the monsoon season. The pause affects the Pokhara–Bharatpur Distribution System Strengthening Initiative under the Nepal Electricity Authority and is expected to last until mid-August.
Orthodox tea exports rise by 40.5 percent in eleven months
Nepal’s export of orthodox tea increased by 40.5 percent in the first eleven months of the current fiscal year, thanks to a strong harvest. According to Mechi Customs Office in Kakarbhitta, Jhapa, the country exported orthodox tea worth Rs 3.86 billion during this period, marking a significant improvement compared to last year.
Budget delays and permit issues disrupt Mahakali corridor progress
Construction on the Mahakali Corridor has been hampered by budget constraints and delays in obtaining tree-felling permissions. Work was halted in the month of Baisakh after funds were exhausted. Although Rs 100 million has since been released to resume some activities, the project has requested a budget of Rs 1.5 billion for the next fiscal year to continue road development and improvements.
Koshi Province business community urges higher real estate loan limits
Industrialists and business leaders in Koshi Province have recommended raising the loan-to-value (LTV) cap on real estate loans above 50 percent. Submitting suggestions for the upcoming monetary policy, the Koshi Chamber of Commerce called on Nepal Rastra Bank to relax the current LTV limit, which restricts the amount of loan relative to the market value of collateral.
Hetauda announces Rs 2.9 billion budget for fiscal year 2025/26
Hetauda Sub-Metropolitan City has unveiled a budget of Rs 2.93 billion for the fiscal year 2025/26. Deputy Mayor Rajesh Baniya presented the budget during Tuesday’s municipal assembly, noting a 19 percent increase from the previous year’s allocation.
Nepal Lube Oil records Rs 890 million in sales over nine months
Nepal Lube Oil, the official distributor of Gulf-brand lubricants, reported sales of Rs 890 million during the first nine months of the current fiscal year. The company previously registered annual revenues of Rs 1.175 billion in 2024, Rs 927 million in 2023, and Rs 1.245 billion in 2022.
Khalti launches Nepal’s first digital recurring deposit account
Digital wallet Khalti, in partnership with Manjushree Finance, has launched Nepal’s first recurring deposit feature called “Smart Deposit.” This new service enables users to deposit a fixed amount regularly from their wallet and earn interest, providing a convenient savings option via mobile.
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