KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Recent economic, infrastructure, and governance developments in Nepal reflect a mix of cautious optimism and persistent structural challenges. The NEPSE index surged 59.4 points amid election-driven investor confidence, supported by high liquidity and falling interest rates, while gold and silver prices saw marginal declines. Commercial banks posted a modest 8.25% average ROE, highlighting sectoral profitability concerns and a shift of capital toward more lucrative industries.
Public sector performance and infrastructure projects remain uneven: major development ministries lag in capital expenditure, the Nagdhunga-Sisnekhola tunnel faces delays, and illegal cross-border trade in milk and butter underscores supply chain vulnerabilities. Government interventions include Rs 100,000 relief for Baitadi bus victims, enforcement of domestic wood usage in public buildings, and improved tax collection at Hetauda Revenue Office.
Meanwhile, initiatives in tourism, energy, and construction—such as the Mahottari five-star resort, Super Khudi Hydropower IPO, and Nepal Buildcon Expo—signal efforts to attract investment and modernize industries. Enhanced immigration monitoring, data collection on agricultural technicians, and administrative reforms further indicate a focus on regulatory oversight and efficiency, while leadership changes at Nepal Telecom suggest continued prioritization of technological modernization.
Overall, the snapshot reveals an economy navigating immediate fiscal, social, and infrastructural pressures while leveraging upcoming elections and investment opportunities to stimulate growth.
NEPSE index rises 59.4 points amid election optimism
The Nepal Stock Exchange (NEPSE) index climbed 59.4 points, from 2,649.30 on January 6 to 2,708.70 yesterday. Daily turnover rose from Rs 7.5 billion to Rs 11.28 billion. Investors are optimistic about economic stability and youth leadership in the upcoming March election. While liquidity is high and interest rates are falling, growth remains below expectations. Total market capitalization now stands at Rs 45.47 billion.
Gold and silver prices see slight decline
Domestic gold and silver prices have fallen slightly. Gold decreased by Rs 4,200 per tola to Rs 291,000, while silver dropped Rs 270 to Rs 4,710 per tola. Internationally, gold trades at USD 4,828 per ounce and silver at USD 74 per ounce.
Commercial banks record average 8.25% return on equity
During the first half of the current fiscal year, commercial banks posted an average return on equity (ROE) of 8.25%, up slightly from 8.02% in the same period last year. Nabil Bank led the sector with 14.54%, while NIC Asia Bank recorded the lowest at 0.90%. Among 20 banks, 10 experienced a decline in ROE, including Everest and Standard Chartered. Bankers noted that low profitability, rising non-performing loans, and reduced credit flows have prompted some promoters to exit the sector, with investors increasingly diverting capital to more lucrative industries.
Relief of Rs 100,000 announced for Baitadi bus accident victims
The Sudurpashchim Provincial Government has decided to provide Rs 100,000 in compensation to families of those who died in the recent Baitadi bus accident. Minister for Internal Affairs and Law Hira Sarki announced the decision after a cabinet meeting on Friday. The accident occurred Thursday evening in Purchaudi Municipality-7, claiming 13 lives and injuring 34 others. The government has also committed to covering medical expenses at government hospitals for the injured, who are currently receiving treatment in Dadeldhura, Dhangadhi, and Bajhang.
Capital expenditure of development ministries remains low
Data from the Financial Comptroller General Office shows that none of the 12 major development ministries had reached 30% of their capital expenditure by mid-January. The Ministry of Culture, Tourism, and Civil Aviation recorded the lowest spending at 2.68%, utilizing just Rs 130 million of its Rs 4.84 billion allocation. Meanwhile, the Ministry of Physical Infrastructure and Transport, which had the largest budget of Rs 1.44 billion, spent Rs 25.58 billion (17.72%). Ministries cited Gen Z protests, holidays, and frozen funds as key reasons for slow spending. The Ministry of Finance is coordinating with lagging ministries to expedite payments for completed projects.
Nagdhunga tunnel operation delayed to mid-april 2026
The Nagdhunga-Sisnekhola tunnel project now faces a three-month delay, with operations expected to begin by mid-April 2026. Heavy rains in October 2025 triggered a landslide at the western portal in Dhading, damaging three of five access lanes and delaying toll plaza construction. The project requested an additional Rs 5.7 billion from JICA, bringing total costs to Rs 27.7 billion. Ten international joint ventures are competing for the five-year management contract, with JICA advising against blacklisted or state-owned Chinese companies for the 150-staff operation.
Nepal imports Rs 2.673 billion worth of millet
Over the past four and a half years, Nepal imported millet worth Rs 2.673 billion despite rising health awareness and domestic demand. Customs data shows that in the first seven months of the current fiscal year 2025/26, around 7.4 million kg of millet valued at Rs 375.9 million were imported from India, China, and Qatar. Domestic production has fallen from 339,000 metric tons in 2021/22 to roughly 300,732 metric tons in 2023/24. The Ministry of Agriculture has allocated Rs 60 million to 88 local units to promote indigenous crops and reverse the production decline.
Milk and butter smuggling to india rises amid price hike
The Central Dairy Cooperative Association has reported a surge in the illegal export of milk and butter to India via border points in Sarlahi, Parsa, and Rupandehi. Vice Chairman Bhagirath Timilsina said smugglers are exploiting higher Indian prices, where milk rates now exceed Nepal’s average of Rs 90 per liter. The Dairy Development Corporation confirmed its butter stock has halved, from 800,000 kg to 400,000 kg. Despite Nepal producing 7.5 million liters of milk daily, authorities warn that unregulated cross-border trade is affecting domestic supply chains and formal collection centers.
Hetauda Revenue Office collects Rs 3.279 billion in six months
The Inland Revenue Office in Hetauda collected Rs 800.8 million last month, bringing the six-month total to Rs 3.279 billion, up Rs 88.6 million compared to the same period last year. Excise duty contributed Rs 1.886 billion, while income tax generated Rs 593.2 million. Aggressive door-to-door campaigns and SMS alerts helped recover Rs 100 million in arrears. The branch currently has 33,596 registered income taxpayers and over 81,000 individual taxpayers.
Ministry plans mandatory use of domestic wood in government buildings
The Ministry of Forests and Environment is drafting guidelines to require Nepali wood in all government building projects. Spokesperson Bishal Ghimire and Minister Madhav Prasad Chaulagai said the policy aims to be implemented before the upcoming elections. While Bagmati Province already adopted a similar rule in April 2024, the federal government seeks to standardize supply and quality across all seven provinces. Officials are considering allowing domestic wood even if it costs up to 15% more to promote local industry and sustainable forest management.
Immigration Department expels 333 foreign nationals for illegal activities
Between mid-July 2025 and January 14, the Department of Immigration arrested and expelled 333 foreign nationals for illegal activities, including unauthorized marriage bureaus and religious proselytizing. Director Tikaram Dhakal said offenders were fined and barred from re-entering Nepal for specified periods. The Foreign National Management Information System (FNMIS), launched on January 1, now requires hotels and travel agencies to link records to track foreign nationals and enhance security.
Ministry requests data on local agriculture and livestock technicians
The Ministry of Agriculture and Livestock Development has requested detailed information on agriculture and livestock technicians across local levels. Local units must submit records, including appointment letters and contract renewals, via email by February 22. The initiative, approved on February 5, aims to improve budget planning and program effectiveness under the Local Level Agriculture Graduate Technician Operation Procedure 2026.
11th Nepal Buildcon International Expo opens in Kathmandu
The 11th Nepal Buildcon International Expo was inaugurated Friday at Bhrikutimandap, Kathmandu. Organized by Media Space Solutions and Futurex Trade Fair, the exhibition features over 300 national and international brands across 200 stalls. Showcasing modern construction technologies such as architectural hardware, sanitary ware, and heavy machinery, the expo runs until February 8 and aims to connect Nepali builders with global innovations. Sponsored by Flybird Interior and Lumbini Ceramics, it highlights sustainable materials and infrastructure solutions.
First Rs 1.2 billion five-star resort to be built in Mahottari
Satya Group announced the construction of the Shangri-La Premier Resort and Casino in Prakouli, Mahottari, with an investment of Rs 1.2 billion. The luxury project will include 75 international-standard rooms, a premium casino, and a banquet hall. Funded 70% by bank loans and 30% by equity, the resort is expected to generate 200 local jobs and transform the Jaleshwar-Janakpur region into a major tourism hub near the Indian border. Land acquisition is complete, and construction is underway.
Lumbini Province PSC invites applications for various posts
The Lumbini Province Public Service Commission has announced vacancies in administration, engineering, agriculture, and health sectors. Applications can be submitted online until February 26, with fees of Rs 400 plus Rs 150 per extra group. Age limits are 35 for males and 40 for females and health service applicants. Late applications with double fees will be accepted until March 5, providing a final chance to join the provincial civil service.
Super Khudi Hydropower to launch IPO on February 16
Super Khudi Hydropower Limited will open its IPO for the general public on February 16. Following a local and migrant workers’ phase, the company is offering 1,286,500 shares at Rs 100 each, totaling Rs 128.6 million. Investors can apply for 10 to 100,000 shares via the C-ASBA system until February 22. Global IME Capital manages the sale, and the project carries a Care-NP BB rating.
Reena Dangol appointed interim MD of Nepal Telecom
Reena Dangol, Chief Technical Officer at Nepal Telecom, was appointed Interim Managing Director effective Friday. The decision was approved by the Prime Minister and the Ministry of Communication and Information Technology. Dangol, an electronics engineer who joined in FY 1994/95, has previously led provincial directorates in Biratnagar and Kathmandu. She pledged to modernize technology and strengthen the company’s financial capacity while aligning with government and customer priorities.
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