KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy presents a mixed picture of cautious recovery and persistent structural challenges. The stock market posted modest gains amid low trading volumes, while the central bank’s liquidity withdrawal and weak loan recoveries underscore tight financial conditions. Gold prices fell sharply even as imports surged, reflecting speculative investment patterns amid global price volatility.
The widening trade deficit, declining land revenue, and stalled infrastructure projects point to sluggish domestic activity, although renewed tourism in Pokhara, increased cardamom exports, and festival-driven demand in regions like Janakpur and Mustang offer some optimism. Meanwhile, industrial disruptions—such as protests at NEPSE and damages from the Gen Z movement—highlight underlying governance and policy gaps.
Overall, despite signs of post-festival revival and diaspora investment interest, Nepal’s short-term outlook remains constrained by liquidity pressures, low capital spending, and fragile investor confidence.
NEPSE ends higher on Sunday, gains 5.19 points
The Nepal Stock Exchange (NEPSE) closed slightly higher on Sunday, gaining 5.19 points to settle at 2,509 after recovering momentum later in the afternoon. Earlier in the day, NEPSE had dipped to 2,470 points—the day’s lowest. Trading activity remained subdued, with total turnover reaching Rs 2.66 billion, down from Rs 2.79 billion recorded on the last trading day before Tihar. Out of the listed companies, 98 saw share price gains, 146 declined, and 4 remained unchanged.
Gold prices plunge by Rs 11,600 in a single day
Gold prices fell sharply by Rs 11,600 per tola on Sunday, dropping to Rs 241,900, according to the Federation of Nepal Gold and Silver Dealers’ Association. Before Tihar, hallmark gold was priced at Rs 253,500 per tola. Silver prices also declined by Rs 265 per tola, reaching Rs 3,015 from the previous Rs 3,280.
Gold imports soar in first quarter of FY 2025/26
Gold imports surged sharply in the first quarter of the current fiscal year, reaching 601 kilograms of raw gold and nearly 5 kilograms of jewelry, according to the Department of Customs. During the same period last fiscal year, only 113.5 kilograms were imported. The rise is attributed to higher global gold prices, encouraging investors to increase gold holdings as a safe asset.
Nepal records nearly Rs 400 billion trade deficit in first quarter
Nepal posted a trade deficit of around Rs 395 billion in the first three months of FY 2025/26, according to the Department of Customs. As of mid-October, imports totaled Rs 468 billion, while exports stood at Rs 72.82 billion. Overall foreign trade reached Rs 540 billion, leaving a substantial trade imbalance during the review period.
NRB withdraws Rs 90 billion from banking system
Nepal Rastra Bank (NRB) withdrew Rs 90 billion in liquidity from the banking system on Sunday. Banks had previously deposited Rs 125 billion before the Tihar holidays. The central bank withdrew the funds for a 42-day period using its open market operations to balance liquidity—absorbing excess funds from banks and injecting liquidity when needed.
Banks under stress as loan repayments lag
Banks and financial institutions are facing pressure after failing to recover loan principal and interest due by mid-October. According to agreements, borrowers were required to make payments in the first quarter, but many did not, impacting the banks’ quarterly balance sheets. Delays in repayment risk increasing the volume of non-performing loans and require higher loss provisions.
Land revenue collection dips in first quarter
Land revenue declined by 8% in the first three months of the current fiscal year compared to the same period last year. The total collection fell by Rs 830 million—from Rs 10 billion to Rs 9.17 billion—due to a 6% drop in land transactions. According to the Department of Land Management and Records, 342,000 land deals were recorded this year, down from 362,000 in the previous year.
NEPSE employees stage protest over unpaid bonuses
Employees of the Nepal Stock Exchange (NEPSE) staged a protest inside the exchange premises on Sunday, escalating their ongoing dispute over unpaid bonuses. Previously, they had been wearing black armbands before the Tihar holidays. Workers have been on strike since September 23, demanding that management implement a labor court directive requiring 5% of NEPSE’s annual profits to be distributed as staff bonuses.
BP Highway reconstruction to start after Chhath festival
The long-delayed permanent reconstruction of the BP Highway is set to begin immediately after the Chhath festival. The Department of Roads confirmed that work will start in sections where contracts have already been awarded. Earlier plans to begin construction after Dashain were postponed due to heavy rainfall, floods, and landslides that damaged temporary tracks. The project is expected to be completed by July 2027.
Twelve inactive irrigation contracts terminated
The government has terminated 12 long-stalled irrigation contracts that had remained incomplete for years under the former People’s Embankment Program Field Office No. 2 in Jaleshwar, Mahottari. Additionally, six contracts under the Babai Irrigation Project were given a 15-day termination notice on October 16. Minister for Energy, Water Resources, and Irrigation Kulman Ghising had instructed agencies to cancel projects where contractors failed to make progress.
Nepali-origin entrepreneurs in Texas express willingness to invest in Nepal
Nepali-origin entrepreneurs based in Texas have expressed readiness to invest in Nepal, provided the government ensures a favorable business climate. Speaking at the “Business and Investment Conference 2025” in Dallas, they said they are keen to channel their overseas earnings into industries in Nepal to support national economic growth, urging authorities to introduce investor-friendly policies and simplify regulations.
Government to cover losses from Gen Z movement, says finance minister
Finance Minister Rameshore Khanal announced that the government will compensate private sector losses incurred during the Gen Z movement if insurance or financial institutions fail to do so. The minister made the statement while receiving a report titled The Road Ahead for Economic Recovery from the Nepalese Association of Financial Journalists (NAFJ). He emphasized that the government would ensure businesses affected by the protests are supported if no other compensation mechanism exists.
Thai AirAsia resumes regular flights to Bhairahawa
Thai AirAsia resumed regular international flights to Gautam Buddha International Airport in Bhairahawa on Sunday. The Airbus A320 aircraft, carrying 17 passengers from Thailand, landed at 12:48 PM—slightly later than its scheduled time of 12:15 PM. The return flight carried 162 passengers. Officials said the airline will operate twice weekly, on Sundays and Wednesdays.
Over 30,000 foreign tourists visit Annapurna region in one month
Between mid-September and mid-October, a total of 30,547 foreign tourists visited the Annapurna region, according to the Annapurna Conservation Area Project (ACAP). Of them, 10,019 were from South Asian countries, while 20,528 were from other regions. The figure represents a slight decline of 185 visitors compared to the same period last year, which officials attributed to the September Gen Z protests and adverse weather affecting Indian arrivals.
Tourist influx revives Pokhara’s hospitality sector
Pokhara’s tourism industry, which had been experiencing a slowdown, is witnessing a strong revival. The extended Dashain–Tihar holidays, clear weather, and panoramic views of the Annapurna range have led to packed hotels and bustling restaurants. Adventure activities such as paragliding, bungee jumping, and zip-lining have also seen a surge in visitors, further boosting local businesses.
Cardamom exports rise by 33% in first quarter
Cardamom exports through Mechi Customs rose by 33% in the first quarter of the fiscal year 2025/26, totaling Rs 1.679 billion. The office reported that 1,072 metric tons of cardamom were exported during the period, compared to exports worth Rs 1.072 billion in the same quarter of FY 2024/25.
Banana prices soar in Janakpur during Chhath festival
With the start of Chhath celebrations, demand for bananas has skyrocketed in Janakpur and nearby Dhanusha markets. Vendors report brisk sales as banana bunches — a key offering to the Sun God — are in high demand across Mahendranagar, Dhalkebar, Birendrabazar, Godar, Sabaila, Bateshwar, and Laxminiya markets.
Narayanpur–Rajpur road project remains incomplete
The long-planned Narayanpur–Rajpur road section connecting Rapti Sonari Rural Municipality in Banke and Rajpur in Dang remains unfinished. Despite a detailed project report (DPR) prepared years ago, construction has not started. According to Postal Highway Project Chief Lil Bahadur Bhandari, an estimated Rs 6 billion is required to complete the section, which is crucial for finalizing the Postal Highway network.
Mustang hotels fully booked after Tihar
Following the Tihar festival, hotels across Mustang district are fully booked, mainly by domestic tourists. Many travelers have opted for the Pokhara–Beni–Jomsom–Korala route, filling lodges and guesthouses across all five rural municipalities. The influx has revitalized local businesses along the trekking corridor.
Shangri-La Group’s hotel construction costs escalate
The Shangri-La Hospitality Group, known for its five-star establishment in Kathmandu, has reported rising costs in its ongoing hotel projects. The group is building three star-category hotels across Nepal, with construction expenses now exceeding original estimates. Plans include upgrading its Pokhara property to a five-star standard and developing resorts at two additional sites.
Maulekali Cable Car incurs Rs 700 million damage in Gen Z protests
The Maulekali Cable Car in Gaindakot, Nawalpur, suffered nearly Rs 700 million in damages after protesters vandalized and set fire to its lower station on September 9 during the Gen Z movement. Reconstruction work is underway, including flooring, painting, and electrical repairs. The management aims to resume operations by mid-November.
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