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 is showing mixed signals of growth and structural challenges. While Nepal Rastra Bank forecasts above-average economic growth for fiscal 2025/26 driven by low inflation, falling interest rates, higher hydropower output, and expansion in construction and manufacturing, seasonal and regional constraints continue to affect development, such as halted infrastructure projects in Karnali due to extreme cold.
Efforts to attract foreign investment have been eased through NRB’s fifth amendment, aiming to improve transparency and capital inflow, while domestic sectors see mixed trends: rising gold and silver prices reflect increased demand or inflationary pressures, Kailali Customs revenue shows slight underperformance due to reduced imports, and Syangja’s orange production signals successful agricultural commercialization.
Infrastructure initiatives like Bharatpur’s electrification project and short-term measures such as Pokhara’s planned power outages highlight ongoing modernization efforts, whereas the surge in illegal crypto trading among youth underscores emerging financial risks. Policy and administrative adjustments, including Sudurpashchim’s reversal on small projects and adjustments to flight fares, reveal government
interventions aimed at stimulating investment, capital expenditure, and affordability in key sectors. Overall, the data suggest cautious optimism, with economic growth opportunities tempered by infrastructural, climatic, and regulatory challenges.
Gold and silver prices continue to rise
Gold and silver prices increased on Friday. Gold rose by Rs 2,900 per tola to Rs 262,500, while silver increased by Rs 10 per tola to Rs 4,415, according to the Federation of Nepal Gold and Silver Dealers’ Association.
NRB forecasts higher economic growth for fiscal year 2025/26
Nepal Rastra Bank predicts that the economy will grow above average this fiscal year, supported by liquidity expansion and monetary easing. The Economic Activity Study Annual Report highlights low inflation, falling interest rates, and higher hydropower output as key growth drivers. While last year’s growth was 4.6%, the central bank expects expansion in construction and manufacturing sectors. Bagmati Province remains the largest contributor at 36.5% of GDP, while Karnali accounts for just 4.2%.
NRB simplifies foreign investment rules with fifth amendment
Nepal Rastra Bank has issued the fifth amendment to the Foreign Investment and Foreign Loan Management Bylaw, 2021, making it easier to bring in and repatriate foreign capital. Companies, including those previously blacklisted, can now invest without prior NRB approval, though blacklisted firms must be cleared before repatriating dividends. IT companies can invest up to USD 20,000 abroad through commercial banks without extra approval, while larger investments are capped at 50% of average export earnings or USD 1 million. The changes aim to make Nepal more attractive and transparent for international investors.
Flight fares decrease following fuel price cut
The Civil Aviation Authority of Nepal has lowered the airfare fuel surcharge after Nepal Oil Corporation reduced aviation fuel by Rs 6 per liter. The Kathmandu-Dhangadhi route saw a Rs 265 reduction to Rs 5,655, while Mountain Flight charges fell by Rs 210. The Kathmandu-Simara route dropped by Rs 55. The move is aimed at making domestic air travel more affordable.
Insurers pay out Rs 5.48 billion for Gen Z protest damages
Non-life insurers in Nepal have disbursed Rs 5.482 billion in claims linked to the Gen Z protests on September 8-9, 2025. Out of 3,316 claims totaling Rs 23.47 billion, property insurance made up the largest share with Rs 3.93 billion. Nepal Reinsurance Company provided Rs 3.2 billion in advance payments to primary insurers. Separately, claims for monsoon-related damages since mid-October have totaled Rs 196.4 million, mainly covering property and engineering risks.
Cold weather halts infrastructure projects in Karnali highlands
Construction work in Jumla, Humla, and Dolpa districts of Karnali Province has stopped due to extreme cold. Cement-based projects, including roads, bridges, and buildings, are suspended as sub-zero temperatures affect material quality. The Infrastructure Development Office in Jumla reported that work on the Luma and Nyaurighat bridges will resume in mid-February. Patarasi Rural Municipality has instructed contractors to halt cement-related work to avoid substandard construction, worsening the region’s low capital expenditure.
Sudurpashchim government reverses decision to cancel small projects
The Sudurpashchim Province government has withdrawn its earlier plan to cancel projects with budgets below Rs 1 million. Originally aimed at cutting costs, the reversal seeks to boost capital expenditure, which is currently just 3%. Spokesperson Navaraj Ojha noted that a Supreme Court interim order on consumer committees also influenced the decision. Chief Minister Kamal Bahadur Shah’s administration has instructed ministries to proceed with small-scale and consumer committee-led projects to accelerate stalled development.
10th Export Day to feature trade fair in Thamel
The Export Council of Nepal will celebrate its 10th Export Day with a trade fair at Chhaya Center, Thamel, on January 4-5. The event will showcase handicrafts, agricultural products, and carpets for international markets. Despite exports of Rs 93.5 billion in the first four months of the fiscal year, challenges remain, including high transport costs and limited cold storage. The fair also encourages youth entrepreneurship and seeks to reduce the trade deficit through increased foreign earnings.
Kailali customs collects over Rs 3 billion in five months
The Kailali Customs Office has collected Rs 3.207 billion in revenue during the first five months of fiscal year 2025/26, achieving 95.6% of its Rs 3.355 billion target. The shortfall is attributed to reduced imports amid an economic slowdown. Petroleum products were the top imports, while exports, including resin and plywood, totaled Rs 463.7 million. The annual target is Rs 9.711 billion.
Syangja produces oranges worth over Rs 1.32 billion
Syangja district produced 23,238 metric tons of oranges this year, generating over Rs 1.32 billion in revenue—a Rs 200 million increase from last year. Productivity rose to 16.37 tons per hectare across 2,400 hectares of orchards. Declared a Superzone in fiscal 2018/19, the district now supplies commercial orange produce to cities including Kathmandu and Pokhara, with 90% of the harvest sold externally.
Bharatpur underground electrification project reaches 83% completion
The underground electrification project in Bharatpur Metropolitan City is 83% complete. Chief Engineer Anand Subedi said most areas are finished, with final installations pending in Hakimchowk, Sahidchowk, and near Birendra College. Funded by the Asian Development Bank and executed by Tata Projects Limited, the project’s cost has reached Rs 1.4 billion. Completion is expected by mid-March.
Pokhara faces morning power cuts for four days
Electricity in Pokhara Metropolitan City, Kaski, will be interrupted for five hours each morning from 6 am to 11 am for four consecutive days starting Friday. The Nepal Electricity Authority’s Pokhara Grid Station said the outage, affecting the Kundahar substation, is required to maintain the 132 kV busbar panel. Normal supply is expected after 11 am on Tuesday.
NRB study links youth and students to illegal crypto trading
A report by Nepal Rastra Bank’s Financial Information Unit shows a rise in illegal cryptocurrency trading despite legal bans. From 2021 to 2024, suspicious transactions rose from 13 to 252, with 92% of offenders aged 21-40 and students accounting for 29%. Most activities were reported by commercial banks, highlighting the use of banking and Hundi systems for unregulated virtual trading.
Comment