KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest economic indicators present a mixed but cautionary picture of Nepal’s economy at the start of the New Year, marked by softening financial markets, rising structural stress in the banking sector, and persistent reliance on external drivers. The decline in the NEPSE index alongside falling gold and silver prices reflects subdued investor sentiment, likely influenced by liquidity concerns, higher non-performing loans, and weak private-sector confidence.
The sharp rise in banks’ non-banking assets underscores prolonged economic stagnation and difficulties in loan recovery, while the loss of US trade preferences adds pressure on export competitiveness. At the same time, the reopening of the Rasuwagadhi border and the crossing of one million foreign arrivals signal gradual recovery in trade and tourism, partially offset by continued large-scale labor migration abroad.
Sectoral snapshots, from poultry and cardamom to hydropower and aviation. reveal resilience in agriculture and demand-driven services, but also expose governance gaps, infrastructure fragility, and operational inefficiencies. Overall, the data suggest an economy navigating recovery amid structural weaknesses, where short-term activity gains coexist with deeper challenges in investment confidence, industrial sustainability, and institutional capacity.
NEPSE slips by nearly 13 points on New Year’s opening session
The Nepal Stock Exchange (NEPSE) index declined by 12.83 points on the first trading day of the New Year, closing at 2,620.92, down 0.48 percent. The fall came a day after the index had gained around 10 points. Total turnover on Thursday stood at Rs 4.71 billion, with more than 100 million shares traded. Except for the “other” category, all 12 sectoral sub-indices—including banking and life insurance—closed lower. Wean Nepal Microfinance hit the upper circuit with a 10 percent gain, while Global IME Samunnat Yojana touched the lower circuit. SY Panel led the market in turnover, recording transactions worth Rs 234.1 million.
Gold and silver prices edge lower in domestic market
Gold prices declined slightly on Thursday, falling by Rs 1,400 per tola to Rs 259,600, according to the Federation of Nepal Gold and Silver Dealers’ Association. The previous day’s price stood at Rs 261,000 per tola. Silver prices also eased, dropping from Rs 4,470 per tola to Rs 4,415.
Nepali exports to the US face tariffs of up to 26 percent
From Thursday, 77 categories of Nepali goods exported to the United States will be subject to tariffs of up to 26 percent following the expiry of a duty-free trade facility. The preferential access, granted by the US in 2015 after Nepal’s earthquake, ended yesterday (Thursday). The Export Council of Nepal said products such as pashmina shawls, mufflers, and hats will now face duties 6 to 16 percent higher than the standard 10 percent rate. Despite Nepal’s request for a five-year extension, the facility was not renewed, potentially weakening Nepal’s competitiveness compared to exporters from India and Bangladesh.
Non-banking assets jump to Rs 51 billion over five years
Assets seized by banks and financial institutions have surged sharply over the past five years, reaching Rs 51 billion by mid-November 2025. According to Nepal Rastra Bank, these non-banking assets—mainly land and buildings acquired through loan defaults—stood at just Rs 10 billion in 2022. The average non-performing loan ratio has risen to 5.26 percent from 4.42 percent a year earlier. Commercial banks alone account for Rs 43.19 billion of such assets. Weak economic activity and prolonged uncertainty, including the impact of recent Gen Z protests, have dampened private sector confidence and made it difficult for banks to sell seized properties.
More than 1.5 million Nepalis traveled abroad in 2025
At least 1.523 million Nepalis left the country between January 1 and December 31, 2025, according to the Department of Foreign Employment. During the same period, around 1.313 million returned. The data also show strong foreign arrivals, with 1.015 million tourists entering Nepal and 982,561 departing. While most foreign nationals visited on tourist visas, Nepalis primarily traveled abroad for employment and education, followed by business and tourism. The figures highlight Nepal’s continued dependence on labor migration alongside a gradual recovery in domestic tourism.
Rasuwagadhi border resumes operations after six months
The Rasuwagadhi border crossing with China reopened fully on Thursday after remaining closed since July 8, 2025. Chinese authorities completed construction of a 91-meter motorable bridge over the Lhende River to replace the structure destroyed by floods. The new bridge can carry loads of up to 55 metric tons. According to the Rasuwagadhi Customs Office, Nepali cargo has already begun crossing into Kyirong. The prolonged closure had caused revenue losses exceeding Rs 22 billion. However, drivers continue to express concern over damaged road conditions between Syabrubesi and Rasuwagadhi following the monsoon.
Immigration records show over one million foreign arrivals in 2025
The Department of Immigration reported that 1,015,378 foreign nationals entered Nepal in 2025, while 982,561 exited during the same year. Most visitors arrived on tourist visas, though the department manages 10 different visa categories, including labor and study permits. Crossing the one-million mark is seen as a positive sign for the economy, indicating not only tourism recovery but also growing international engagement in education and professional sectors.
Poultry sector posts Rs 145 billion turnover amid structural challenges
Nepal’s poultry industry recorded an annual turnover of Rs 145 billion, according to the Nepal Poultry Federation. Total investment in the sector is estimated at Rs 160 billion. Despite near self-sufficiency in eggs and meat, the industry has shrunk significantly since the pandemic, with broiler hatcheries declining from 340 to 109. The sector spends around Rs 45 billion annually on imported feed ingredients, medicines, and equipment. The Nepal Feed Industries Association estimates that 99 percent of soybean and 50 percent of maize used in feed are still imported.
NAC adds Wednesday flight to Suketar airport schedule
Nepal Airlines Corporation has increased flight frequency to Suketar Airport in Taplejung to three services per week. Flights on the Kathmandu–Taplejung–Kathmandu route will now operate on Mondays, Wednesdays, and Fridays throughout January. Previously, only two weekly flights were available. The additional service responds to growing passenger demand, with one-way fares set at Rs 9,403. A decision on resuming flights from Biratnagar has yet to be made.
Taplejung cardamom farmers earn over Rs 5 billion despite lower output
Large cardamom production in Taplejung declined by 248 metric tons this year, even as cultivation expanded to 4,578 hectares. The Agriculture Knowledge Center reported total output of 2,291 metric tons, down from 2,539 last year due to prolonged drought. However, high market prices—reaching Rs 102,000 per 40 kilograms—helped farmers earn approximately Rs 5.49 billion. Although prices have recently eased to Rs 96,000, cardamom remains a major cash crop across 60 wards of the district.
Rs 470 million milk powder plant in Hetauda faces shutdown risk
A milk powder processing plant built with Rs 470 million in provincial funding in Hetauda risks closure before becoming fully operational. Established in fiscal year 2020/21, the facility lacks a clear management and operational model. Although the Dairy Development Corporation conducted trial runs in 2023, no formal agreement was finalized. The current agriculture minister is considering a public-private partnership after DDC declined to share profits. Auditor General reports have flagged cost overruns of Rs 61 million and inadequate storage facilities.
Technical problems halt production at Middle Tamor hydropower project
Power generation at the 73 MW Sanima Middle Tamor Hydropower Project in Taplejung has been suspended for nearly three weeks due to technical issues. Operations stopped in mid-December 2025, coinciding with scheduled annual maintenance. Authorities said repairs and routine servicing are being carried out simultaneously, with all required spare parts already delivered. The project, operational for two years, supplies electricity to the national grid through the Basantpur substation.
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