KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal is poised at a pivotal economic juncture as the government prepares to unveil the fiscal year 2082/83 budget, amid rising market activity, structural reforms, and external engagement. While the NEPSE index shows bullish sentiment, supported by the banking sector, gold prices dropped sharply, indicating shifting investor behavior.
Meanwhile, Nepal Rastra Bank is tightening liquidity, and its leadership appointment now faces judicial scrutiny. The government is advancing key infrastructure projects like the Mid-Hill Highway and embracing reforms such as project bank standards and wage adjustments tied to inflation.
However, it is also courting controversy by planning to lift court-imposed bans on construction material exports. Concurrently, proposals for double tax avoidance agreements from the UAE and UK reflect growing international interest, even as domestic challenges—like lapsing insurance policies, unpaid taxes, and damaged roads—highlight areas needing urgent attention. Overall, the landscape reflects a push for reform and investment amid fiscal, legal, and policy complexities.
Finance Minister to present fiscal budget today
The Federal Parliament has announced that the annual budget for the upcoming fiscal year 2082/83 will be presented at 3 PM today (Thursday). Federal Parliament Secretary-General Padma Prasad Pandey released the agenda, confirming that Finance Minister Bishnu Prasad Poudel will present the annual revenue and expenditure estimates during a joint session of the Federal Parliament.
NEPSE index climbs by 17.44 points
The Nepal Stock Exchange (NEPSE) index gained 17.44 points on Wednesday, closing at 2,693. Trading activity also increased significantly, with turnover rising to Rs 8.58 billion from Rs 6.52 billion the day before. Share prices rose for 148 companies, fell for 97, and remained unchanged for 2. The market saw an upward push starting at 2:10 PM, largely driven by the banking sector, which posted a 1.88% gain. NEPSE overall rose by 0.61%.
Gold price drops by Rs 1,600 per tola
On Wednesday, the price of gold dropped by NPR 1,600 per tola (11.66 grams). The Federation of Nepal Gold and Silver Dealers Association fixed the price at NPR 189,300 per tola. The previous day’s price was NPR 190,900 per tola. On Baisakh 9, gold had reached its all-time high of NPR 197,900 per tola. Despite the drop in gold price, silver increased by NPR 10 per tola.
NRB to absorb Rs 80 billion from banking system
Nepal Rastra Bank plans to withdraw Rs 80 billion from the banking sector on Wednesday to address surplus liquidity. The central bank has announced a 21-day auction for banks and financial institutions, with bidding scheduled for Sunday at 3 PM. Minimum bids start at Rs 100 million, and institutions can bid up to the full amount in increments of Rs 50 million.
Supreme Court questions appointment of NRB Governor
The Supreme Court has issued a show-cause notice regarding the appointment of Dr. Biswo Nath Poudel as the Governor of Nepal Rastra Bank. The notice follows a writ petition challenging his selection. Justice Abdul Aziz Musalman’s bench has also called both sides for a hearing on the issue.
Tax office gives 15-day notice to 21 firms over unpaid dues
The Medium-Level Taxpayers Office has issued a 15-day ultimatum to 21 companies for failing to clear outstanding taxes. The unpaid amounts include income tax, VAT, and excise duty. The office warned it would begin legal recovery procedures if payments are not made on time. Among those named are Shri Laligurans and Shikhardeep Multipurpose Cooperatives—both declared troubled institutions—as well as Mount Everest Brewery, Sanbhi International, Bishal Cement, and department stores in Pokhara and Gorkha.
Project bank standards to apply at all government levels
Starting this fiscal year, national project bank standards will be enforced at the federal, provincial, and local levels. As the government finalizes the budget, the National Planning Commission has recommended minimum thresholds: projects above Rs 30 million at the federal level, above Rs 10 million at the provincial level, and smaller ones at the local level. The new standards, named “National Project Bank Standards 2081,” are based on constitutional provisions.
Govt backs fixed interest rate policy, but keeps rate undefined
The Government of Nepal has shown support for implementing a fixed interest rate policy as proposed by the High-Level Economic Reform Commission, led by Rameshwor Khanal. However, it has not specified what that fixed rate will be. The private sector is calling for a 5.5% cap, while bankers suggest a more practical rate of 9–10%. The issue remains under policy discussion.
UAE and UK propose double tax avoidance agreements to Nepal
The United Arab Emirates (UAE) and the United Kingdom (UK) have submitted proposals to Nepal seeking Double Taxation Avoidance Agreements. Along with showing interest in investing in Nepal, they have sent separate proposals to the Investment Board. Since individuals earning income abroad pay taxes in the foreign country and then again in their home country upon repatriation, these bilateral agreements aim to prevent such double taxation burdens.
Govt preparing to lift ban on construction material exports, defying court order
Although the Supreme Court has banned the export of construction materials like stones, gravel, and sand, the government is preparing to lift this restriction. Officials from the Ministry of Industry, Commerce, and Supplies indicated that the proposal might be part of the upcoming fiscal year 2082/83 budget or implemented through the economic reform action plan. This decision is expected to trigger legal and environmental debates, as it contradicts judicial orders designed to protect Nepal’s vulnerable ecosystems.
Govt to review minimum wage based on inflation
The government has proposed adjusting worker wages to reflect inflation. During a Cabinet meeting on May 20 (Jestha 6), a decision was made to review wage rates within the coming year to address the rising cost of living. This initiative supports the Economic Reform Commission’s recommendations, led by former Finance Secretary Rameshwor Khanal, emphasizing periodic reviews to ensure workers receive fair compensation.
Over 1.2 million life insurance policies inactive due to lapse or no renewal
A significant number of life insurance policies in Nepal have become inactive because of lapses or non-renewal. According to the Insurance Authority, as of the end of fiscal year 2081/82 (April 2025), 1,246,301 policies worth NPR 36.87 billion have lapsed. This highlights concerns over policyholder engagement and the need for better awareness and retention strategies within the insurance sector.
NEA publishes list of top 10 electricity consumers in Nepal
The Nepal Electricity Authority (NEA) released a list of the country’s top ten electricity consumers, based on high usage and timely bill payments. The list mainly features large industries in the steel and cement sectors, including Sarbottam Steel Ltd, Goyal Ispat Pvt. Ltd, Premier Steel Pvt. Ltd, Hongshi Shivam Cement Pvt. Ltd, and others. This effort aims to promote transparency and encourage energy efficiency among major industrial consumers.
Pushpalal Mid-Hill Highway gets top budget priority
The next fiscal year’s budget prioritizes the Pushpalal (Mid-Hill) Highway Project. Stretching 1,879 kilometers from Panchthar in the east to Baitadi in the west, the project’s cost has escalated to approximately Rs 100 billion. Originally estimated at Rs 33 billion, the cost was revised to Rs 84.33 billion last year and is now projected at Rs 100 billion by the Ministry of Physical Infrastructure. The highway project, initiated in fiscal year 2064/65 BS (2007/08 AD), is targeted for completion by fiscal year 2084/85 BS (2027/28 AD).
Landslide-damaged Narayanghat–Muglin road not to be rebuilt this fiscal year
A 165-meter stretch of the Narayanghat–Muglin road, damaged by landslides during heavy rain last September (Ashoj), will not be reconstructed this fiscal year due to budget limitations. The damaged section subsided about 8 meters in depth. According to Narayan Lamichhane, chief of the Division Road Office, other parts of the road also show cracks and require repairs. Comprehensive reconstruction is planned for the next fiscal year.
Jadgulla hydropower issues letter of intent for EPC contract
Jadgulla Hydropower Company Limited has issued a letter of intent for the civil and hydro-mechanical Engineering, Procurement, and Construction (EPC) contract. The qualified bidder is a joint venture between Jiangxi Construction Engineering (Group) Corporation (China) and ANK Construction Nepal, quoting NPR 12.15 billion excluding taxes. The letter was issued on Tuesday, and dissatisfied parties like Sino Hydro Corporation have 15 days to appeal to the Public Procurement Review Committee, according to CEO Sanjay Sapkota.
Koshi Province races to prepare budget for fiscal year 2082/83
Koshi Province is fast-tracking its budget preparation for the fiscal year 2082/83 (2025/26). Ministries are actively submitting project proposals, while lobbying from ministers, MPs, and local leaders to include regional projects is intensifying. To address criticisms of discretionary practices, the government introduced the “Project Bank” system this year to ensure a more transparent and methodical project selection process.
Citizens Bank clients to get discount at Hilton Hotel
An agreement has been reached to offer special discounts to customers of Citizens Bank International at Hilton Hotel Kathmandu. Cardholders, privilege cardholders, and mobile banking users of Citizens Bank will receive up to a 10% discount. The bank believes this collaboration will benefit customers and encourage digital transactions over cash. Citizens Bank has been introducing customer-friendly digital services to promote digital payments.
Himalayan life insurance declares 8% cash dividend
Himalayan Life Insurance Company has announced an 8% cash dividend from its profit for the last fiscal year (2079/80 BS). The decision was made at a board meeting held on May 28, 2025. Based on the company’s current paid-up capital, a total of NPR 731.45 million will be distributed to shareholders as cash dividends.
IPO of Trade Tower Company opens today for general public
The ordinary shares (Initial Public Offering – IPO) of Trade Tower Company have opened for the general public. The company had previously issued IPOs for Nepalis living abroad and has now opened IPO applications for the general public starting Wednesday. The company received approval to issue 3,971,693 units of shares with a face value of NPR 100 each, totaling NPR 3.97 billion, which is 48.696% of its issued capital of NPR 8.15 billion.
Agriculture and livestock service center inaugurated in Dhading
Minister for Agriculture and Livestock Development, Ramnath Adhikari, has inaugurated a newly built Agriculture and Livestock Service Center in Tripurasundari Rural Municipality of Dhading district. Constructed under the Rural Enterprise and Economic Development (REED) Project, the center is expected to provide services such as soil testing, crop advisory, and animal disease diagnostics, helping local farmers access timely and affordable support.
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