KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
The latest developments present a mixed picture of Nepal’s economy, where strong investment ambitions and sectoral opportunities continue to coexist with deep structural weaknesses.
While initiatives such as the Social Security Fund’s shift toward infrastructure and green energy financing, growing foreign investment interest from Sri Lanka, rising IPO activity, and the Himalayan Travel Mart’s international outreach signal confidence in Nepal’s long-term growth potential, concerns over governance, productivity, and execution remain significant.
The suspension of customs officials over alleged fraud highlights persistent institutional accountability challenges, while the Nepal Rastra Bank’s warning on remittance dependence underscores vulnerabilities in the country’s growth model. At the same time, low budget utilization in Madhesh Province, supply-chain disruptions affecting major road projects, and rising food and gold prices point to implementation bottlenecks and inflationary pressures.
Together, these developments suggest that achieving ambitious targets such as a USD 100 billion economy will require not only greater investment and private-sector participation but also stronger governance, improved public spending efficiency, and a transition toward more productive, export-oriented economic activities.
Finance Ministry suspends Rasuwagadhi Customs chief and eight officials
The Ministry of Finance has suspended the chief customs officer of the Rasuwagadhi Customs Office along with eight other employees and recalled them to departmental headquarters following recommendations from an investigative committee. The action followed an internal audit that uncovered fraudulent customs clearance documents issued for imported vehicles that had not entered through the border point. Separately, the ministry deployed a joint team comprising under-secretaries, Nepal Police officers, and Armed Police Force personnel to inspect vehicle clearance procedures at the Korala checkpoint in Mustang. The operation resulted in the seizure of several vehicles suspected of irregularities.
SSF targets green energy and key infrastructure investments
The Social Security Fund (SSF) approved a green energy investment strategy on Saturday, prioritizing projects in hydropower generation, solar energy, transmission infrastructure, and domestic clinker production. Records show that the state-run pension fund has accumulated Rs 111.07 billion in contributions from participants. As part of efforts to diversify beyond conventional bank deposits, the fund plans to extend working capital financing, fixed-asset loans, and co-financing support to public companies. Under its investment criteria, projects below 20 megawatts, private ventures, enterprises lacking at least 30 percent equity participation, and projects facing unresolved utility connection issues will not qualify. The fund currently includes 23,476 registered employers and 2,958,429 contributors and has paid out Rs 20.452 billion in insurance-related benefits.
NRB study highlights risks of growing remittance dependence
A research paper titled “Economic Stability and the Nation: Achievements and Future Guidance,” released by the Nepal Rastra Bank (NRB), has warned that increasing remittance inflows are unintentionally shifting Nepal’s economy away from productive sectors and toward consumption-driven activities. According to the central bank, greater reliance on remittances has reduced labor participation in agriculture and manufacturing, contributing to lower labor productivity compared with neighboring countries. While remittances continue to strengthen foreign exchange reserves, the report notes rising vulnerabilities in the banking sector, with the non-performing loan ratio increasing from 1.3 percent in 2022 to 4.62 percent by July 2025.
Gold price rises by Rs 18,400 per tola in one week
Gold prices climbed by Rs 18,400 per tola (11.66 grams) during the week following the announcement of the fiscal year 2026/27 budget, according to the Nepal Gold and Silver Dealers’ Association. On May 30, when the budget was unveiled, gold was priced at Rs 290,600 per tola. The following day, the rate jumped sharply by Rs 20,500 to reach Rs 311,100 per tola. Prices fluctuated throughout the week, slipping to Rs 310,900 on June 1, increasing to Rs 311,300 on June 2, remaining unchanged on June 3, and easing to Rs 311,100 on June 4. On June 5, the price declined by Rs 2,100 to Rs 309,000 per tola. Despite this drop, gold remained Rs 18,400 higher than its budget-day value.
Bitumen shortage and rising costs stall major highway paving projects
A prolonged shortage of bitumen, coupled with significant increases in bitumen and diesel prices linked to geopolitical tensions in the Gulf region, has halted road paving work on several major highways. The price of bitumen has nearly doubled, rising from Rs 80 per kilogram to between Rs 150 and Rs 160 per kilogram. Temporary export restrictions imposed by India also forced contractors to cancel letters of credit for imports. Industry assessments indicate that continuing construction under current pricing conditions would increase project costs by approximately Rs 20 million per kilometer. As a result, contractors have suspended blacktopping work on the Nagdhunga–Muglin Road Project, where 44 kilometers of paving remain unfinished.
Madhesh spends only 19 percent of annual budget in 11 months
Financial data released by the Ministry of Economic Affairs shows that the Madhesh Province government utilized only 19.4 percent of its allocated budget during the first 11 months of the current fiscal year. Of the total Rs 46.983 billion budget, only Rs 9.119 billion has been spent. Recurrent expenditures amounted to Rs 5.324 billion, while capital spending reached Rs 3.795 billion, aided by an additional Rs 364.2 million spent during the most recent week of reporting.
Egg prices increase by 20 percent
The Nepal Layers Poultry Farmers Association announced higher farm-gate prices on Saturday after holding a virtual executive committee meeting. Industry observers attributed the increase to intense summer temperatures, changes in production levels, and rising expenses for poultry feed and veterinary supplies. Under the revised pricing structure based on the Chitwan market, a crate of 30 extra-large (XL) eggs now costs Rs 560, large eggs are priced at Rs 545 per crate, and medium eggs at Rs 515. Small egg crates are being sold at Rs 3,000 per case, bringing the average retail price to around Rs 25 per egg. Overall, prices have risen by 20 percent over the past month, compared with the benchmark rate of Rs 465 recorded on May 7.
Koshi introduces project registry requirement and budget limits
The Koshi Province government has imposed spending caps and stricter planning guidelines for provincial lawmakers ahead of its annual budget presentation scheduled for June 15. Under the new framework, directly elected members of the Provincial Assembly may recommend projects worth up to Rs 40 million, while proportional representation members are limited to proposals totaling Rs 20 million. To improve fiscal planning and project management, the Ministry of Economic Affairs and Planning has made it mandatory for all proposed development projects to be included in the official Koshi Project Bank, which currently contains 33,415 registered projects.
Sixth Himalayan Travel Mart concludes successfully after four-day tourism gathering
The Pacific Asia Travel Association (PATA) Nepal Chapter successfully wrapped up the sixth edition of the Himalayan Travel Mart (HTM 2026) in Kathmandu, drawing more than 600 international participants from 27 countries. Held from June 1 to June 4, 2026, the event promoted Nepal under the theme “New Dimensions of Tourism,” positioning the country as a leading gateway to the Himalayas. The tourism marketplace hosted 75 international buyer organizations and over 80 global sellers for business-to-business engagements. Prior to the event, international delegates participated in familiarization tours to Pokhara, Lumbini, Haibung, Kirtipur, and Namobuddha.
Traffic police fine 2,511 drivers and collect over Rs 2 million in one day
The Kathmandu Valley Traffic Police Office took action against 2,511 motorists for various traffic violations within a 24-hour period, generating more than Rs 2 million in revenue through fines. Records show that 193 drivers were penalized for driving under the influence of alcohol, 166 for operating unauthorized ride-sharing services, 129 for ignoring traffic signals, and 167 for speeding. Additional violations included 42 cases of improper lane usage, 165 incidents of unauthorized horn use, 156 cases of illegal parking on pavements, 168 one-way traffic violations, and 1,325 other forms of traffic non-compliance.
CNI unveils roadmap for a $100 billion economy
The Confederation of Nepalese Industries (CNI), in collaboration with the Investment Board Nepal, has released an economic outlook report projecting that Nepal’s economy could expand to USD 100 billion within the next decade. Prepared by more than 20 experts over an eight-month period, the report uses 2025 as its benchmark year and estimates that achieving the target would require average annual growth of 6 percent through 2033 in nominal terms or 2039 in real terms. To support this goal, CNI has proposed 100 policy and investment measures covering energy, manufacturing, information technology, commercial agriculture, and infrastructure development.
Six companies seek IPO approval from SEBON
Six companies from Nepal’s hydropower and manufacturing sectors have submitted applications to the Securities Board of Nepal (SEBON) for approval to launch initial public offerings (IPOs). Among them, Raghuganga Hydropower plans the largest share issuance, offering 15 million shares worth Rs 1.50 billion through NIC Asia Capital. Rajesh Metal Crafts aims to raise Rs 600 million, while Premier Distillery seeks Rs 225 million. Likewise, Super Hewa Power plans to mobilize Rs 192.5 million, Yuvrani Agro Industries targets Rs 165 million, and Annapurna Machha Dana Udyog intends to raise Rs 100.9 million through public share offerings.
FNCCI and Ceylon Chamber strengthen investment cooperation
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) organized a bilateral business forum with the Ceylon Chamber of Commerce, resulting in investment commitments from Sri Lankan businesses interested in Nepal. The event brought together 50 senior business representatives from each country to explore trade and investment opportunities. Participants identified hydropower, hospitality, tourism infrastructure, and Ayurvedic product processing as promising sectors for collaboration. Sri Lankan delegates emphasized the need for simpler administrative procedures, while organizers highlighted Nepal’s single-window investment system and its immediate hydropower generation potential of 40,000 megawatts.
National technology conference begins in Nepalgunj
The Institute of Engineering and Information Technology under Lumbini Technological University inaugurated the two-day National Technology for Transformation Conference in Nepalgunj on Saturday. Organized by the university’s Research, Innovation, and Development Unit, the event aims to connect technological research with practical solutions to local challenges. The conference features nine specialized thematic sessions and has brought together around 250 technology professionals, researchers, data experts, and engineering students. Discussions focus on integrating emerging technologies and automation into the long-term development plans of Lumbini Province.
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