KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic and financial landscape presents a complex picture of cautious progress and persistent challenges. While the NEPSE index dipped by 18 points, active trading signals continued investor engagement. Gold prices surged sharply due to global trends, prompting the government to remove the luxury tax to ease domestic pressure.
Strong remittance inflows and growing foreign investment boosted forex reserves and dividend repatriation, offering macroeconomic support. Meanwhile, excess liquidity led the central bank to withdraw Rs 50 billion, as the government turned to treasury bills for short-term financing.
Despite these positives, Nepal’s chronic trade deficit persists, and development projects like the Muglin–Pokhara road and Gurgi irrigation remain delayed. Sector-specific updates—from microfinance gains and rising labor permits to soybean oil surpassing diesel imports—highlight evolving consumption patterns and economic shifts.
Nepse drops by 18 points on Sunday
The Nepal Stock Exchange (NEPSE) index declined by 18 points (0.65%) on Sunday, closing at 2,739.95. Despite the drop, trading remained active, with over 14 million shares worth Rs 6.54 billion exchanged. By the end of trading, share prices of 41 companies had risen, while 208 saw a decline. No company’s share price remained unchanged. A total of 323 companies were traded, with more than 58,000 individual transactions recorded.
Gold price jumps by Rs 2,300 per tola
The price of gold surged by Rs 2,300 per tola on Sunday, reaching Rs 197,500 for hallmark gold, up from Rs 195,200 on Friday. The Federation of Nepal Gold and Silver Dealers’ Association reported the sharp rise in response to fluctuations in international markets.
Remittance inflows hit Rs 1.72 trillion in FY 2024/25
Nepal received remittances totaling Rs 1.72 trillion in the fiscal year 2024/25, marking a 19.2% increase compared to the previous year, according to Nepal Rastra Bank. This boost in remittances helped raise the country’s foreign exchange reserves by 31.2%, reaching Rs 2.67 trillion. Of this, the central bank alone holds Rs 2.41 trillion, up from Rs 1.84 trillion last fiscal year.
NRB withdraws Rs 50 billion amid excess liquidity
Amid surplus liquidity in the financial system, Nepal Rastra Bank has withdrawn Rs 50 billion using deposit collection instruments through auction. The current total deposit in the system has exceeded Rs 7.2 trillion. Only Class A, B, and C financial institutions authorized by the central bank were allowed to participate in the auction.
Government to raise Rs 5 billion through treasury bills
The government plans to raise Rs 5 billion in internal loans through 28-day treasury bills on Monday. The Public Debt Management Office stated that the funds will be used to renew maturing treasury bills. Bidding is open until 3 PM on August 25, after which the bills will be issued. The interest rate will be determined through the auction process.
Nepal logs trade deficit with 86 countries in first month of FY 2025/26
In the first month of fiscal year 2025/26, Nepal recorded a trade deficit with 86 out of 111 trading partner countries. The Department of Customs noted that Nepal had a trade surplus with only 25 countries. During the same period last year, Nepal traded with 103 countries, with a trade deficit in 90 and a surplus in just 13.
Foreign investment companies report profit growth
Foreign-invested firms operating in Nepal have shown improved earnings this fiscal year. According to the Department of Industry, over Rs 2.9 billion in dividends was repatriated in the first month of FY 2025/26 alone. In contrast, only Rs 64 million was repatriated during the same period last year.
Government plans to buy Twin Otter planes for each province
The government is preparing to acquire seven Twin Otter aircraft for domestic operations, one for each province. Tourism Minister Badri Pandey said the plan aims to address air service disruptions in mountainous and hilly districts. The purchase will be made in partnership with the private sector through a transparent procurement process.
Microfinance sector benefits from lower interest rates
Lower bank interest rates have boosted the profitability of microfinance institutions. Out of 52 such institutions, 51 recorded a combined profit of Rs 842.41 million in FY 2024/25 — a 68.23% increase from the Rs 507.6 million reported in the previous year. Only Super Microfinance was declared problematic by the central bank.
Ministry revives plan to establish fertilizer plant
To tackle the persistent shortage of chemical fertilizers, the Ministry of Industry, Commerce, and Supplies is moving forward with plans to build a fertilizer factory. Nepal Oil Corporation has been assigned the task, and a delegation led by Executive Director Dr. Chandika Prasad Bhatta is currently in India to discuss collaboration with Indian Oil Corporation.
Luxury tax on gold trade removed
The government has removed the tiered 2% luxury tax imposed on gold transactions in the current fiscal year’s budget. The move follows strong opposition from gold traders. Dharma Sundar Bajracharya, Vice President of the Federation of Nepal Gold and Silver Dealers Association, confirmed the removal. The 13% VAT on gold, however, remains in place.
Labor permit issuance rises in first month of FY 2025/26
The number of labor permits issued increased in the first month of fiscal year 2025/26 compared to the same period last year. The Department of Foreign Employment reported that 68,110 permits were issued this year, up from 59,575 in FY 2024/25. Director General Kamal Prasad Bhattarai attributed the rise to growing demand from foreign labor markets.
Agriculture ministry launches nationwide survey
The Ministry of Agriculture and Livestock Development has initiated a nationwide agricultural survey to gather official statistics from the agriculture and livestock sectors. The ministry stated that the goal is to ensure transparent and reliable data collection. Currently, surveys are being conducted in five provinces in coordination with provincial ministries.
Bagmati province spends Rs 387 million in first month
The Bagmati Provincial Government spent Rs 387.34 million in the first month of fiscal year 2025/26, according to the Ministry of Economic Affairs and Planning. This represents just 0.06% of the province’s total allocated budget of Rs 67.47 billion for the year, based on expenditure details up to the end of Shrawan.
China’s EXIM Bank to support two hydropower projects in Nepal
The Export-Import Bank of China (EXIM Bank) will act as a financial facilitator for two major hydropower projects in Nepal through Sanima Bank Limited. These include the 135 MW Manang Marsyangdi Hydropower and the 120 MW Langtang Bhote Koshi Hydropower projects. Sanima Bank has been appointed EXIM Bank’s representative in Nepal following an MoU signing event in China’s Sichuan province.
Beer industry sees rising imports of raw materials and bottles
The import of raw materials and glass bottles for beer production continues to grow annually, with three major breweries sourcing these items through the Krishnanagar border. In the last two years, Rs 197.63 million worth of malt and Rs 187.04 million worth of bottles have been imported for beer production.
Gurgi irrigation project in Kailali remains incomplete after 56 years
The Gurgi Irrigation Project in Kailari Rural Municipality–2, Kailali, remains incomplete 56 years after it began. A dam built in 2006 was destroyed by floods a year later, halting progress. Despite repeated budget allocations, the project has stalled due to the absence of a stable water source, officials from the Water Resources and Irrigation Division Office in Sudurpaschim said.
Soybean oil imports surpass diesel for first time
In a notable shift in Nepal’s import patterns, soybean crude oil has overtaken diesel as the most imported product by volume and value in the first month of FY 2025/26. Nepal imported 7.18 million liters of soybean oil worth Rs 1.08 billion—its highest ever for this period. Last year, 9.07 million liters worth only Rs 130.79 million were imported.
Tata EV auto show concludes in Birgunj
Sipradi Trading Pvt. Ltd., the official distributor of Tata Motors in Nepal, concluded a Tata EV Auto Show in Birgunj on Sunday. Organized in collaboration with Prime Auto Traders, the event was held at Hotel Vishuwa on Bypass Road from August 22 to 24. The show featured Tata’s latest electric vehicles and special offers for customers.
Mabilung Energy IPO allotment completed
Mabilung Energy’s initial public offering (IPO) allotment has been completed. The allotment process was managed by Laxmi Sunrise Capital and conducted formally after the IPO closed between August 11 and 14. Out of 2,205,871 applicants, 8,289 were disqualified due to incomplete or invalid applications.
Muglin–Pokhara road project sees fourth deadline extension
The eastern section of the Muglin–Pokhara road project has received its fourth deadline extension. The Ministry of Physical Infrastructure and Transport extended the project from Jamune to Aanbukhaireni until October 11. The previous deadline expired on July 13, according to project engineer Bishnu Prasad Pandey.
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