KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy reflects a mix of structural strength and underlying fragility, where strong external indicators—such as a rising balance of payments surplus driven by remittances—contrast with weak domestic confidence, sluggish credit growth, and policy inertia, exemplified by delays in reforms like the NEPSE-30 index.
While financial activity is picking up in areas like margin lending, it is concentrated among large investors, suggesting uneven market participation. Simultaneously, rising fuel costs, declining industrial activity in regions like Jumla after subsidy tightening, and falling tourism in areas like Sikles point to pressure on the real economy.
Governance efforts—ranging from crackdowns on illegal industries and cooperative fraud to stricter labour enforcement and stalled contract terminations—indicate a push for accountability, yet also expose systemic weaknesses in regulation and implementation.
Public sector initiatives, including infrastructure upgrades, economic surveys, and rescue operations abroad, highlight active state intervention, but delays in provincial budgeting and reliance on imports (especially from India) underscore persistent structural constraints, suggesting that without coherent policy execution and private sector confidence, economic stability may remain uneven.
NEPSE-30 index rollout delayed amid management inaction
The proposed ‘NEPSE-30’ index—intended to track 30 top-performing companies on the Nepal Stock Exchange—remains on hold despite earlier preparations. The plan was finalized during the tenure of a previous chairman but stalled before receiving final board approval. The index was designed to strengthen the market by including firms with strong fundamentals, such as book value above par and consistent profitability in at least three of the past five years. The initial list featured eight commercial banks and eight microfinance institutions. Although the methodology was developed and the Securities Board of Nepal was informed, the current leadership has yet to advance its implementation.
Margin lending in stock market rises by 11.1 percent
Loans backed by shares have increased significantly, rising by 11.1% during the review period. Nepal Rastra Bank reported that banks and financial institutions issued Rs 156.27 billion in margin loans by mid-March, up by Rs 15.57 billion since July. A large portion of this growth came from high-value borrowers taking loans above Rs 10 million, while the number of mid-range borrowers also increased notably.
Gold steady while silver gains Rs 50 per tola
Gold prices remained unchanged in the domestic market, while silver rose by Rs 50 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold is currently priced at Rs 294,000 per tola, while silver stands at Rs 4,830. The stability in gold prices follows a recent decline earlier in the week, while silver has shown a modest upward trend.
Fuel price rises to Rs 202 per litre in Kathmandu
The Nepal Oil Corporation has increased fuel prices by Rs 15 per litre following a board decision, effective from midnight Thursday. Petrol prices now stand at Rs 199.50, Rs 201, and Rs 202 per litre across different regions, while diesel and kerosene are priced at Rs 179.50, Rs 181, and Rs 182, respectively. Despite the hike, the corporation projects monthly losses of around Rs 11.71 billion due to rising global oil prices linked to tensions in West Asia.
NRB revokes licenses of two money exchange firms
The Biratnagar office of Nepal Rastra Bank has cancelled the licenses of two money exchange companies—Amrit Laxmi Money Exchange in Morang and Super Fine Money Exchange in Biratnagar—for failing to renew permits within the required grace period. The action was taken under the Exchange Transaction Licensing and Inspection Regulations, 2020. The central bank stressed that timely renewal is essential to maintain regulatory compliance and transparency in foreign exchange operations.
Balance of payments surplus climbs to Rs 658 billion
According to Nepal Rastra Bank, Nepal’s balance of payments (BOP) recorded a surplus of Rs 658.35 billion in the first eight months of the current fiscal year, a sharp increase from Rs 310.37 billion in the same period last year. In US dollar terms, the surplus stands at USD 4.61 billion. Foreign direct investment (equity) rose to Rs 10.84 billion, while the current account also remained positive at Rs 552.85 billion, indicating strong external sector stability.
Postal services to handle international shipments even on public holidays
The Ministry of Communication and Information Technology has coordinated efforts to ensure international parcel services continue through the General Post Office in Dillibazar, even during public holidays. Previously, operations were disrupted due to the closure of customs offices and banks. Following the directive, the Department of Customs and Rastriya Banijya Bank are preparing to remain operational to facilitate clearance and revenue processing. Between mid-February and mid-March, the office handled over 19,200 imports and 11,700 exports, collecting nearly Rs 2.9 million in customs revenue.
Labour office freezes accounts of two firms for violations
The Labour and Employment Office has frozen the bank accounts of two companies for breaching labour laws, following inspections of 175 establishments. During the first eight months of the fiscal year, authorities rescued 20 children engaged in labour from hotels and factories and returned them to their families. Employers were fined Rs 225,000 and required to pay Rs 22,000 in compensation. Investigations also found that many small businesses failed to provide appointment letters, minimum wages, or social security benefits. Out of 45 labour-related complaints, 29 have been resolved so far.
Interest rates decline but credit growth remains weak
Recent data from Nepal Rastra Bank shows that while interest rates have fallen, lending to the private sector has grown modestly by just 4.4%. Total credit reached Rs 5.74 trillion, while deposits increased by 6.6% to Rs 7.74 trillion. The average lending rate for commercial banks dropped to 6.90% from 8.40% a year ago. Despite ample liquidity, private sector confidence remains subdued due to global price pressures and past economic instability. While consumption and construction sectors saw growth, agricultural lending declined.
Government mobilises Nepal Airlines for West Asia rescue flights
Amid rising tensions in West Asia, the Government of Nepal has deployed Nepal Airlines Corporation to operate rescue and facilitation flights for Nepali nationals starting April 3. The move followed a high-level decision led by Foreign Minister Shishir Khanal. Scheduled flights include Kathmandu–Dubai and Kathmandu–Dammam routes. Earlier, 291 Nepalis and the bodies of nine deceased nationals were repatriated via Kuwait Airways to Gautam Buddha International Airport, according to the Ministry of Foreign Affairs.
Nepalgunj customs records Rs 53.9 billion trade in eight months
The Nepalgunj Customs Office reported total trade worth Rs 53.916 billion in the first eight months of FY 2025/26, reflecting a 5% increase year-on-year. Imports accounted for Rs 51.983 billion, while exports stood at Rs 1.933 billion, showing a slight decline. Revenue collection reached Rs 12.754 billion. Trade with India dominated overall figures, largely driven by fuel and food imports.
Lumbini province yet to start budget preparations
The Lumbini Province government has not yet begun drafting its budget for FY 2026/27 due to delays in receiving the federal budget ceiling. Although guidelines were expected by late March, political transitions at the federal level have slowed the process. Officials anticipate a smaller budget than the current Rs 38.91 billion to improve implementation efficiency. The National Natural Resources and Fiscal Commission has recommended an equalization grant of Rs 8.562 billion. The province must present its budget by June 15, leaving limited time for consultations.
More than 800 production-based industries in Jumla have ceased operations following stricter subsidy regulations, according to the Office of Industry and Consumer Interest Protection. Of the 5,389 registered units, 832 have been liquidated, many of which were reportedly established primarily to access government grants. Currently, 1,535 industries are inactive. Monitoring indicates that while women-led enterprises in sectors such as dairy and furniture remain stable, many non-genuine operators exited after dual subsidies were curtailed by agencies like the Agriculture Development Office. Authorities are now focusing on transparent, merit-based support to promote sustainable employment.
Ten stalled contracts scrapped along Karnali highway
The Road Division Office in Jumla has moved to terminate 10 long-delayed contracts on the Karnali Highway. Action was initiated after issuing a 15-day notice to six contractors who failed to complete projects despite repeated extensions. The cancelled contracts include works handled by Dhurva Construction Service and Krishna Construction Service, along with projects awarded to Avinash Construction Service and Binamra Construction Service on key road sections. The decision aligns with government efforts to eliminate non-performing or “sick” contracts.
Illegal crusher plants face crackdown in Nawalparasi
Authorities in Nawalparasi (Bardaghat Susta Paschim) have stepped up monitoring of unauthorized crusher industries following directives from the Ministry of Home Affairs. The move comes after concerns raised by Council of Gen Z about illegal operations across multiple districts. Around a dozen crusher plants are currently under review, with strict action, including closure, planned against those operating without permits or violating environmental standards. Local residents have welcomed the initiative, citing environmental and safety concerns.
Abukhaireni rural municipality upgrades roads using internal funds
Abukhaireni Rural Municipality has begun upgrading and blacktopping four kilometers of road using its own budget. The project covers the Samastipur–Giranchaur and Hilekharka–Baradi stretches and will be completed in phases. Initial work focuses on the Jogini Bhanjyang to Ward No. 6 section, while federal funding of Rs 60 million will support additional upgrades within the current fiscal year. The initiative aims to strengthen local infrastructure through internal resource mobilization.
Tourist arrivals drop in Sikles during March
Visitor numbers declined in Sikles in March, with 1,926 tourists recorded, according to the local Tourist Information Center. The decrease has been attributed to unfavorable weather conditions. Situated at 1,950 meters, Sikles is known for its Gurung culture and as a gateway to trekking routes such as Kaphuche, Kori, and Dudhpokhari. Despite the decline, the village remains a key tourism destination.
Dhanusha gears up for national economic census from April 15
The District Economic Census Office in Dhanusha has urged businesses to cooperate with the upcoming National Economic Census starting April 15. Officials emphasized that accurate data collection across 18 sectors will be crucial for shaping provincial economic policies. The exercise will continue until June 21, with local business leaders highlighting the importance of reliable data for addressing industrial challenges.
Nationwide cooperative survey begins to assess sector performance
The National Statistics Office, in collaboration with the Department of Cooperatives, has launched the country’s first comprehensive survey of cooperatives. Running from April 2 to June 24, the study will assess the economic contribution and condition of over 32,000 cooperatives. Field surveys will focus on 465 large institutions, collecting data on capital, employment, and lending to inform future policy decisions.
Gautamshree cooperative CEO arrested in major fraud case
Police have arrested the chief executive officer of Gautam Shree Cooperative in connection with a fraud case involving over Rs 5.5 billion. The Kathmandu Valley Crime Investigation Office made the arrest as part of an ongoing investigation into financial misconduct. The cooperative has already been declared problematic, and while the CEO is in custody, the chairman remains absconding. The case is part of a wider crackdown on irregularities in the cooperative sector.
Nicholas Pandey elected president of contractors’ federation
Nicholas Pandey has been elected president of the Federation of Contractors’ Associations of Nepal during its 13th general convention. He secured 514 votes, defeating his nearest rival. A 51-member executive committee has been formed, with Ramji Pant as senior vice president and Shivahari Ghimire as general secretary. The new leadership is expected to tackle key issues such as delayed payments and stalled infrastructure projects.
Dialogue, not intimidation, key to boosting revenue: Finance Minister
Finance Minister Swarnim Wagle has urged officials at the Birgunj Customs Office to meet revenue targets through dialogue rather than coercion. During an inspection on Friday, Wagle emphasized that while revenue collection targets must be achieved, engaging constructively with industrialists and entrepreneurs is essential. “Revenue should be increased through dialogue, not intimidation or raids,” he told customs officials. He also expressed concern over reports of bribery in government offices and stressed the need to end such practices. The minister said the government would implement a system of rewards and punishments to ensure accountability.
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