KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is navigating a volatile intersection of domestic political transition and escalating regional conflict, with sharp commodity price swings, fiscal tightening, and external vulnerabilities shaping the outlook. While gold prices have plunged and customs revenues and tourism arrivals show pockets of resilience, structural weaknesses persist—evident in heavy iron imports despite untapped domestic reserves and a reduced budget ceiling reflecting weak revenue performance.
War-driven uncertainty in the Middle East has disrupted flights, stranded migrant workers, fueled panic-driven spikes in fuel consumption, and raised concerns over remittance stability, even as authorities attempt to maintain liquidity, digital public services, and election-day security. Overall, the developments highlight an economy striving for stability and institutional continuity amid geopolitical shocks and pre-election pressures.
Gold drops Rs 11,000 per tola, silver also declines
Gold and silver prices fell sharply on Wednesday, with gold dropping Rs 11,000 per tola (11.66 grams) and silver declining Rs 275, according to the Federation of Nepal Gold and Silver Dealers’ Association. Following the decrease, gold is being traded at Rs 317,600 per tola, equivalent to 11.66 grams. Silver is priced at Rs 5,540 per tola. The decline in the domestic market comes as gold trades at USD 5,154 per ounce in the international market on the same day.
Iron imports reach Rs 31 billion in seven months
Despite domestic reserves, Nepal imported 741.7 million kilograms of iron and steel products worth Rs 31.09 billion in the first seven months of the fiscal year, according to the Department of Customs. The state-backed Dhowadi Iron Company, established to exploit a major deposit in Nawalparasi, has yet to begin production. Local steel manufacturers continue relying on imported raw materials, contributing to a significant outflow of foreign currency.
Banks to provide limited services during election holidays
Despite a public holiday declared for the general election, several commercial banks will operate selected branches to handle essential transactions. Designated outlets will offer cash counter and clearing services, particularly on Friday, while digital platforms such as ATMs, mobile banking and internet banking will function uninterrupted. Financial institutions have encouraged customers to use online services or visit assigned holiday counters to ensure liquidity and economic activity continue during the election period.
NPC reduces budget ceiling for FY 2026/27
The National Planning Commission (NPC), under Vice Chairman Dr Prakash Shrestha, has fixed a budget ceiling of Rs 1.890 trillion for fiscal year 2026/27—Rs 74 billion less than the current allocation of Rs 1.964 trillion. The revision reflects weak revenue growth and underperformance in capital spending, with only Rs 1.688 trillion expected to be spent this fiscal year. Revenue collection has consistently reached only around 80 percent of targets since 2018/19, prompting the Commission to adopt a more realistic fiscal framework.
Fuel consumption doubles in Kathmandu due to war fears and election
Fuel demand at the Nepal Oil Corporation (NOC) in Thankot depot has doubled over the last three days. Daily sales of petrol and diesel, which average 750 kiloliters, reached 1,381 kiloliters on Monday. Depot Chief Jagdish Yadav attributed the spike to citizens fueling up before traveling home for the Thursday election and fears of supply disruptions following US-Israeli strikes on Iran. On Sunday, petrol sales hit 1,650 kiloliters. NOC assured that supplies are secure through the Amlekhgunj pipeline and urged the public not to engage in panic buying.
NRB Deputy Governors retire ahead of general election
Deputy Governors Dr Neelam Dhungana Timsina and Bam Bahadur Mishra have retired from Nepal Rastra Bank (NRB) after completing their five-year terms on March 8. Owing to public holidays for the March 5 general election, they observed Tuesday as their final working day. Governor Dr Biswo Nath Poudel is now set to recommend four candidates from a pool of 18 executive directors to the Cabinet to fill the vacant posts. Although the interim government’s main responsibility has been conducting the election, appointing new deputy governors remains a key administrative priority for the central bank.
Motor insurance leads non-life premium growth
According to the Nepal Insurance Authority, non-life insurers collected Rs 28.274 billion in premiums in the first seven months of the fiscal year. Motor insurance remained the largest contributor, generating Rs 9.159 billion—up nearly 20 percent year-on-year. Property insurance followed with Rs 6.776 billion, while engineering and contract risk insurance rose by 25.11 percent to Rs 4.517 billion. However, aviation insurance premiums declined by 5.42 percent to Rs 1.281 billion.
Mandatory real estate company provision deferred
The Department of Land Management and Archive has temporarily suspended its decision to require property transactions above Rs 30 million to be conducted through licensed real estate companies. The rule, initially scheduled for implementation in major cities including Kathmandu and Bharatpur, was delayed due to pending technical approvals for Land Service Centers. Until digital systems are fully operational, high-value land transactions will continue under the previous procedures.
Birgunj Customs records 12% increase in import value
The Birgunj Customs Office recorded imports worth Rs 519.1 billion during the first seven months of the current fiscal year. This marks a 12 percent increase, or Rs 57.31 billion, compared to the same period last year. Information Officer Udaya Singh Bista noted that petroleum products accounted for Rs 106.43 billion of the total. Other major imports included iron products at Rs 46.16 billion, machinery at Rs 35.87 billion, and raw soybean oil at Rs 35.67 billion. The surge reflects increased national demand for industrial raw materials and energy.
February tourist arrivals outperform pre-pandemic levels
Nepal recorded 105,441 tourist arrivals in February, an 8.83 percent increase from February 2025. According to the Nepal Tourism Board, this also surpasses the pre-pandemic February 2019 figure of 102,423. Indian tourists led the surge with 22,745 visitors, an 18.5 percent growth. Significant increases were also noted from Sri Lanka (72 percent) and Myanmar (91.6 percent). However, arrivals from Australia plummeted by 61.84 percent, and American visitors decreased by 6.16 percent. January this year also saw a 15.7 percent improvement, indicating a strong start for the tourism year despite regional geopolitical tensions.
Myagdi advances 82 infrastructure projects
In Myagdi district, the Water Supply, Water Resource and Irrigation Development Division is implementing 82 projects this fiscal year with a capital allocation of Rs 116.8 million. The schemes include 34 drinking water projects and 29 river control initiatives. Major works such as the Ratnechaur Lift Drinking Water and Bukeni Irrigation projects have recently been completed, while additional contracts focus on disaster risk reduction and energy infrastructure development.
Mechi Customs revenue rises after digital upgrade
The Mechi Customs Office in Kakarbhitta reported improved revenue collection following the introduction of a Customs Valuation Database system. The office collected Rs 1.513 billion between mid-January and mid-February, surpassing its target. Total revenue for the first seven months reached Rs 9.922 billion, though meeting the annual goal remains challenging amid broader economic constraints.
Commercial coffee farming expands in Bhojpur
Farmers in Bhojpur have shifted from traditional plantation practices to commercial coffee farming, turning it into a growing source of income after securing reliable market access. With traders purchasing coffee directly from farms, producers say marketing challenges have eased and household earnings have increased. Coffee cultivation has expanded in areas including Sindrang, Homtang, Lungin and Lungthung of Hatuwagadhi Rural Municipality, as well as Khoksika in Ramprasad Rai Rural Municipality, Amchowk, Pauwadungma Rural Municipality and Shadananda Municipality. The soil composition, climate and topography of these regions are considered well suited for coffee production.
Tanahu hydropower completes 92 community projects
The 140 MW Tanahu Hydropower Project has finalized 92 community development initiatives in affected areas, with eight more underway. Funded through a USD 505 million package supported by ADB, JICA, EIB and the Government of Nepal/NEA, the project includes bridges, drainage systems and suspension bridges aimed at restoring livelihoods and improving infrastructure.
Labor Department offers online permits during election break
The Department of Foreign Employment has arranged for online labor permit services during the election holidays from March 4 to March 6. As many employees are deployed for election duty, the department will process applications digitally to avoid delays. While labor permits for Gulf countries are currently halted due to the ongoing war, approvals for other destinations will continue through the online system. This measure aims to assist migrant workers targeting non-conflict zones, ensuring their documentation is processed despite the nationwide closure of government offices. The department emphasized that digital services will minimize the impact of the three-day administrative break.
Stranded travelers miss voting opportunity due to flight cancellations
Several migrant workers remain stranded at Tribhuvan International Airport after conflicts in the Middle East led to indefinite flight cancellations. Despite the upcoming House of Representatives election on Thursday, many travelers cannot return to their home districts to vote for fear of missing rescheduled flights. Bhuban Kumar Gurung, president of the Nepal Association of Foreign Employment Agencies, advised workers to return home, as immediate flights are unlikely. Currently, over 1.9 million Nepali laborers are stationed in the Gulf region, with their safety and travel stability severely compromised by the ongoing regional war.
Domestic flights to operate based on demand on election day
The Civil Aviation Authority of Nepal (CAAN) announced that domestic flights will operate based on necessity during the election on Thursday. While international flights to the Middle East remain suspended due to regional conflicts, other global routes will function normally. CAAN clarified that flight schedules for Gulf destinations will be adjusted according to the security situation in the respective countries. Travelers are advised to stay in contact with their airlines for updated timings. This ensures that while ground transport is restricted for election security, essential air connectivity remains available for passengers with valid tickets and urgent travel requirements.
NAC cancels flights to Dammam and Doha
Nepal Airlines Corporation (NAC) officially canceled its scheduled flights to Dammam, Saudi Arabia, and Doha, Qatar, on Wednesday. The national flag carrier issued a public notice citing the intensifying military conflict in the Gulf region as the primary reason for the disruption. NAC advised passengers traveling to Dubai, Doha, or Dammam to contact the airline or check the official website before arriving at the airport. The escalating war has caused widespread instability in international airspace, affecting multiple airlines and significantly impacting the frequency of labor migration and trade between Nepal and the Middle East.
Govt. starts tracking Nepalis stranded in UAE transit
The Department of Consular Services has launched an online portal to collect details of Nepalis stranded in the United Arab Emirates (UAE). Due to regional conflict involving Iran, Israel, and the USA, approximately 250 Nepalis are currently stuck in transit in Abu Dhabi and Dubai, with numbers expected to reach 1,000. Joint Secretary Ramji Khadka stated that airlines are currently responsible for the passengers’ food and lodging. The portal will coordinate rescue efforts for those whose visas were canceled or who are unable to reach their third-country destinations. Flights will prioritize these citizens as soon as regional airspace is declared safe.
Pokhara International Airport records minimal international traffic
Statistics from Pokhara International Airport show that only nine international flight movements occurred in January. During this period, there were five arrivals and four departures, serving a total of only 74 international passengers. Despite Himalaya Airlines operating scheduled flights to Lhasa, China, seat occupancy remains extremely low. Conversely, domestic operations remained robust, with 2,118 flights carrying 72,011 passengers. While domestic travel flourishes, the airport’s international terminal continues to struggle with underutilization, failing to attract significant foreign carriers or high passenger volumes nearly three years after its high-profile inauguration.
Security Committee orders helicopter patrols for election day
The Central Security Committee, led by Home Minister Om Prakash Aryal, met on Wednesday to finalize preparations for the House of Representatives election. The committee decided to deploy helicopters for aerial patrols and keep them on standby for emergency medical evacuations at polling stations. Attended by Home Secretary Rajkumar Shrestha and security chiefs, the meeting concluded that while there are no major security threats, strict action will be taken against those disrupting the peace. Authorities have already coordinated with Chief District Officers across all 77 districts to ensure a high level of vigilance during the voting process on Thursday (March 5).
Gautam Buddha Airport reports zero international passengers
Gautam Buddha International Airport in Bhairahawa recorded zero international flights and zero international passengers in January. According to official airport data, the international terminal remained completely inactive for the entire month. However, the domestic sector saw steady activity with 766 total flight movements. A total of 43,735 domestic passengers used the facility, with 22,959 arrivals and 20,776 departures. The lack of international traffic highlights ongoing challenges in diverting global airlines to Nepal’s second international gateway, leaving the expensive infrastructure dependent entirely on domestic travelers and local flight operations.
Experts warn of economic challenges due to conflict
The Nepal Association of Financial Journalists (NAFIJ) held a seminar on Tuesday regarding the economic impact of the West Asian conflict. Experts, including Nepal Rastra Bank (NRB) Executive Director Ram Sharan Kharel, warned that the war adds new challenges as the economy was just recovering from the Gen Z protests and the pandemic. While petroleum entrepreneur Shiva Prasad Ghimire noted that immediate fuel shortages are unlikely, commerce expert Rabi Shankar Sainju emphasized the need for Nepal to learn lessons in supply chain security. The conflict threatens long-term employment, income from remittances, and the price of essential commodities imported via India.
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