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 picture of Nepal’s economy, marked by strong external inflows and institutional reforms but weak domestic momentum. While remittances surged by over 39 percent, bolstering foreign exchange reserves, and banking deposits continued to rise amid ample liquidity, private-sector credit growth and capital market performance remained subdued, reflecting low investor confidence and political uncertainty.
The decline in the NEPSE index and the concentration of margin lending among large investors further signal cautious market sentiment and limited participation by smaller investors. At the same time, policy measures such as the World Bank–backed inclusive finance project, plans to develop a secondary market for government bonds, expanded social security coverage, and targeted health subsidies point to longer-term structural strengthening.
However, declining foreign aid, modest business registrations, and weak credit demand suggest that translating these reforms and strong external buffers into sustained domestic economic activity remains a key challenge.
NEPSE slips 12.58 points on Tuesday
The Nepal Stock Exchange (NEPSE) index fell by 12.58 points on Tuesday, closing at 2,683.15, a decline of 0.46 percent from the previous session. Trading turnover stood at Rs 8.63 billion, with over 18.7 million shares of listed companies exchanged through more than 92,000 transactions. The Sensitive Index dropped 0.53 percent to 456.71 points. Out of 13 sector indices, only three posted gains, led by Hotel and Tourism with a 1.79 percent rise. Finance declined by 1.09 percent, while commercial and development banks fell by more than 0.6 percent each.
Gold and silver prices edge up
Gold and silver prices rose slightly in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold is trading at Rs 290,300 per tola, while silver has reached Rs 5,335 per tola. On Monday, gold was priced at Rs 286,600 per tola and silver at Rs 5,200.
World Bank approves USD 95 million project for inclusive finance
The World Bank’s Executive Board has approved a USD 95 million (Rs 13.94 billion) financing package to strengthen sustainable and inclusive finance in Nepal. The project aims to improve access to financial services for more than 100,000 small and medium enterprises. It will reinforce the Deposit and Credit Guarantee Fund and modernize the Credit Information Bureau. The initiative aligns with Nepal’s Financial Sector Development Strategy and prioritizes digital integration, credit guarantees, and improved access for women-led enterprises and underserved regions.
NOC says LPG supply has returned to normal
Nepal Oil Corporation (NOC) has assured consumers that the supply of liquefied petroleum gas (LPG) has stabilized after a brief disruption. The shortfall occurred when India’s Barauni Refinery shut down for maintenance, forcing imports from the more distant Paradip Refinery. To avoid shortages during the election period, NOC has sought an additional 2,000 metric tons of LPG for February. In January alone, the corporation imported 47,304 metric tons. NOC has urged consumers to buy only what they need, noting that 50 bullet tankers have already departed from Barauni.
Remittance inflows reach Rs 1.62 trillion in six months
Nepal Rastra Bank reports that remittance inflows totaled Rs 1.62 trillion in the first half of the current fiscal year, marking a 39.1 percent increase year-on-year. In dollar terms, inflows rose 32.3 percent to USD 7.50 billion. January alone saw remittances of Rs 192.62 billion. As a result, foreign exchange reserves climbed to Rs 3.24 trillion. However, economists note that despite strong external indicators, domestic capital spending remains weak and private-sector credit growth has been sluggish.
Social Security Fund collection crosses Rs 100 billion
The Social Security Fund (SSF) has reported total collections of Rs 132 billion, including contributions to the National Welfare Fund. Over the past six years, Rs 101.28 billion has been collected from 671,000 formal-sector employees and around 2 million migrant workers. The fund has so far disbursed Rs 18.5 billion in claims and pensions. To expand access, SSF amended its Investment Procedure 2020, reducing the minimum contribution period for special loans from 36 months to 12 months. Currently, employees from 91 local governments and 38 public institutions are enrolled.
Margin lending rises to Rs 152 billion
Share-backed loans, commonly known as margin nature loans, increased by 8.3 percent over the past six months to reach Rs 152.4 billion by mid-January, according to Nepal Rastra Bank. This represents a rise of Rs 11.7 billion since the beginning of the fiscal year. Borrowers with loans exceeding Rs 100 million account for Rs 106.11 billion of the total, indicating strong participation from large investors. Meanwhile, loans below Rs 25 million stand at Rs 88.27 billion, reflecting limited growth among smaller investors.
Foreign Employment Department to expand orientation centers
The Department of Foreign Employment has announced plans to increase the number of orientation training centers for workers heading to Malaysia. A sharp rise in outbound labor migration has put pressure on existing facilities. The department has invited applications from qualified institutions within three days, in line with the Orientation Training Operation Procedure 2019. The move aims to ensure timely and effective pre-departure training for migrant workers without delays.
Foreign aid declines by 3.5 percent
Nepal mobilized USD 1.37 billion in foreign assistance in fiscal year 2022/23, a 3.5 percent drop from the previous year, according to the Ministry of Finance. Loans made up 66.5 percent of the total aid, while grants and technical assistance accounted for 19.9 percent and 13.6 percent, respectively. Over one-fifth of the assistance was channeled outside the national budget. The government is now implementing the Foreign Aid Mobilization Policy 2026 to enhance transparency and alignment with development priorities.
Bank deposits grow, but credit demand remains weak
Banking sector deposits rose by Rs 417.48 billion to Rs 7.68 trillion by mid-January, according to Nepal Rastra Bank. In contrast, private-sector credit increased by only Rs 197.47 billion, reaching Rs 5.69 trillion. Average lending rates fell to 7.12 percent in January, down from 8.69 percent a year earlier. Despite ample liquidity and lower interest rates, the Federation of Nepalese Chambers of Commerce and Industry attributes weak credit demand to political uncertainty and low investor confidence.
Government plans secondary market for bonds
The Ministry of Finance has outlined a plan to enable secondary market trading of government bonds within five years. Under the Financial Sector Development Strategy, bonds will be dematerialized and integrated into automated trading platforms. The strategy also promotes new instruments such as green bonds, index funds, REITs, and an SME trading platform, alongside exploring crowdfunding and peer-to-peer lending. The goal is to increase investor participation and liquidity in government securities.
Krishi Samagri Company calls global tender for urea
The Krishi Samagri Company Limited has issued an international tender for the supply of 30,000 tons of urea fertilizer (46-0-0). The procurement will follow a single-stage, two-envelope competitive bidding process, with bids due by March 20. A bid security of USD 437,000 is required. The fertilizer will be delivered to warehouses in Biratnagar, Birgunj, and Bhairahawa via Indian ports, aiming to ensure timely availability for the upcoming farming season.
Thalassemia patients to receive Rs 100,000 subsidy
The Ministry of Health and Population has included thalassemia under the Impoverished Citizen Medical Treatment Program, providing treatment support of Rs 100,000 per patient. Bheri Hospital confirmed that beneficiaries can now access surgery, medicines, and laboratory services under the scheme. The program previously covered illnesses such as cancer and heart disease. Health officials say the support will significantly reduce the financial burden on families, particularly in western Nepal.
Compensation fixed for families affected by Tanahun hydropower project
The Compensation Determination Committee has set compensation rates for 10 households affected by the 140 MW Tanahun Hydropower Project in Lokpa, Dharapani, and Jhaputar areas. Compensation has also been finalized for orange orchards damaged during the construction of the Damauli–Bharatpur transmission line. The USD 505 million project is financed by international development partners along with the Government of Nepal.
Bhairahawa Customs collects Rs 50.88 billion in revenue
Bhairahawa Customs Office collected Rs 50.88 billion in revenue during the first half of fiscal year 2025/26, achieving 91.61 percent of its target. Revenue grew by 10.53 percent year-on-year, driven largely by motorcycle imports worth Rs 10.57 billion. Exports through the office doubled to Rs 15.13 billion, led by soybean oil and synthetic yarn.
Prabhu Bank appoints Suman Sharma as CEO
Prabhu Bank’s board has appointed veteran banker Suman Sharma as its new chief executive officer, effective Tuesday. Sharma previously led Machhapuchchhre Bank and Sunrise Bank. He replaces Ashok Sherchan, who was suspended following a Central Investigation Bureau probe. Niraj Lamsal had been serving as acting CEO since late November 2025.
Damauli office registers 335 new businesses
The Integrated Service Office in Damauli registered 335 new firms in the first six months of the current fiscal year, including 180 industries, 153 commercial enterprises, and two tourism businesses. The office collected Rs 4.6 million in revenue during the period and processed over 2,000 renewals. Records also show the closure of 216 businesses and several profile updates.
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