KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic indicators reflect a mixed and fragile economic environment where strong liquidity and policy reforms coexist with weak private sector confidence and mounting inflationary pressure. While banks are flooded with deposits and the government has introduced new customs reforms, digital governance tools and measures to strengthen the financial system, sluggish credit expansion and repeated failures to meet revenue targets point to weak economic activity and limited business confidence.
Rising fuel prices linked to the West Asia conflict are further pushing up transportation and consumer costs, adding pressure on households. At the same time, off-season electricity exports to India, increased public spending, and initiatives such as tighter market monitoring, new loan schemes and tax reform proposals indicate attempts to stimulate economic activity and improve governance.
However, the broader picture suggests that despite adequate liquidity and ongoing reforms, Nepal’s economy is still struggling with low demand, inflationary risks, weak investment momentum and structural inefficiencies in revenue mobilization and implementation.
Nepal’s economy is showing signs of imbalance, with excess liquidity in banks but limited private sector borrowing, indicating weak investor confidence and slow business expansion.
Although the government has accelerated spending and introduced reforms in customs, governance and financial oversight, persistent revenue shortfalls and rising consumer prices continue to expose structural weaknesses in the economy.
Meanwhile, growth in electricity exports and digital policy initiatives offer some positive signals, but inflationary pressure, low market demand and fragile economic activity remain major concerns for policymakers.
Govt spends Rs 1.153 trillion in first 10 months of current fiscal year
As the fiscal year 2025/26 approaches its final two months, the government has spent Rs 1.153 trillion from the national budget. According to the Financial Comptroller General Office, this represents 58.75 percent of the total Rs 1.964 trillion budget allocated for the current fiscal year. Out of the Rs 1.180 trillion allocated for recurrent expenditure, the government has already spent Rs 809 billion.
Gold prices fall by Rs 1,000 per tola in domestic market
Gold prices declined in the domestic market on Sunday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold dropped by Rs 1,000 per tola and was traded at Rs 298,900 per tola. On Friday, gold was traded at Rs 299,900 per tola. Meanwhile, silver prices increased by Rs 25 per tola, reaching Rs 5,300 per tola from Rs 5,275 on Friday.
Deposit growth rises sharply as bank lending remains weak
Nepal’s banking sector is facing mounting pressure as deposits continue to grow rapidly while credit expansion remains sluggish. Recent data show that total deposits in banks have exceeded Rs 7.9 trillion, whereas credit disbursement stands at only Rs 5.874 trillion. This has led to a buildup of investable funds within the banking system. Despite lower interest rates, private sector demand for loans has not picked up as expected, making liquidity management more challenging. Although banks have sufficient liquidity, economic activity on the demand side remains weak.
Nepal resumes off-season electricity exports to India amid higher production
Increased rainfall in recent weeks has boosted electricity generation, allowing Nepal to resume electricity exports to India even during the off-season. More than 300 megawatts of electricity are currently being exported to India at different times of the day, although imports are still continuing. There have been occasions when Nepal alternated between importing and exporting electricity. Exports are higher during nighttime when domestic consumption declines. Normally, Nepal exports electricity to India from mid-June to late December.
Nepal misses revenue collection targets for five consecutive years
Government statistics show that Nepal has consistently failed to meet its revenue collection targets over the past five fiscal years. During this period, average revenue collection reached only 81.7 percent of the annual targets. The highest performance was recorded in fiscal year 2020/21, when 92.5 percent of the target was achieved, while the lowest came in 2022/23 at just 69.3 percent. For the current fiscal year, the government has set a revenue target of Rs 1.480 trillion. By mid-April, around 60 percent of the annual target and 83.61 percent of the target for the first nine months had been collected.
Govt launches online portal for public suggestions on budget and policies
The government has introduced a digital platform to collect public feedback for the upcoming fiscal year 2026/27 policy, programme and budget. The Office of the Prime Minister and Council of Ministers launched the “Suggestion Collection Portal” through suggestions.opmcm.gov.np. Citizens can use the portal to submit recommendations related to the government’s upcoming policy and programme, which is scheduled to be unveiled next Monday. According to the Prime Minister’s Office, the platform aims to promote transparent and people-centered governance.
Government enforces new Customs Regulation
The government has implemented the new Customs Regulation 2026 with the aim of making international trade more technology-driven, transparent and efficient. Nepal’s Ministry of Finance announced through the Nepal Gazette that the nearly 17-year-old Customs Regulation 2008 has been repealed and replaced with a modern framework. The new regulation seeks to simplify import and export procedures while tightening measures to prevent revenue leakage.
Supreme Court orders action against illegal anti-microfinance activities
The Supreme Court has ruled that activities carried out under the banner of the “Protest Group Against Microfinance” pose a serious threat to Nepal’s financial system and rural economy. A joint bench of Justices Hari Prasad Phuyal and Bal Krishna Dhakal directed the government to take strict legal action against illegal activities, including obstruction of microfinance operations, attacks on employees, vandalism and campaigns encouraging borrowers not to repay loans. The court also instructed authorities to ensure the security of microfinance institutions and their employees, while directing Nepal Rastra Bank to strengthen oversight of the sector and act against institutions involved in exploitative practices or excessive interest rates.
Rising fuel prices linked to West Asia conflict hit Nepali consumers
Continuous fuel price hikes triggered by the ongoing conflict in West Asia are now affecting Nepali households. Fuel prices have increased five times over the past two months, driving up transportation and freight costs and placing additional pressure on household expenses. Prices of edible oil, green vegetables, fruits, eggs, cement, iron rods and plastic products have also risen in recent weeks. Consumer rights activists say inflationary pressure has intensified further after transportation fares increased.
‘Price transparency week’ campaign to begin nationwide from today
Amid growing complaints over market irregularities, artificial price hikes and consumer exploitation, the government is launching a nationwide “Price Transparency Week” campaign from Monday. The campaign will continue until May 17 and will involve intensified market monitoring activities from the local to the federal level.
Nepal Bank introduces ‘Plot Loan’ scheme for land buyers
Nepal Bank has launched a new “Plot Loan” scheme aimed at helping individuals purchase land and build homes. Introduced under the slogan “We turn your dreams into reality,” the scheme offers customers easier access to financing for land purchases. One of its key features is a repayment period of up to 20 years, which the bank says will reduce monthly financial pressure and make land ownership more accessible for middle-class families.
Study suggests 60 percent hike in tobacco tax could raise Rs 12 billion
A recent study has indicated that raising the existing 41 percent tax on tobacco products by 60 percent could generate an additional Rs 12 billion in government revenue. Research conducted by the Nepal Development Research Institute found that such a measure could also reduce tobacco consumption by 5 to 11 percent. According to the institute, increasing taxes on harmful products would not only strengthen state revenue but also contribute to better public health by discouraging tobacco use.
Supreme Court allows excise duty relief on industrial packaging materials
The Supreme Court has ruled that wrappers and packaging materials used in industrial production can be classified as raw materials, making manufacturers eligible for excise duty adjustments or deductions. The verdict came in a case filed by Pokhara Noodles, producer of Ramba and Jojo noodles, against the Inland Revenue Department and the Large Taxpayers Office. In its full decision, the court clarified that packaging materials fall under Section 3(A)(3) of the Excise Duty Act 2002 and therefore qualify for excise duty rebates.
Social Welfare Council recovers over Rs 4 million in overdue payments
The Social Welfare Council has recovered more than Rs 4 million in outstanding dues from 20 organisations renting buildings, halls and shops at Bhrikutimandap. The recovery came after the council issued two public notices against defaulters and locked the offices of those failing to clear payments. Out of total arrears amounting to more than Rs 74 million, around Rs 4.07 million has been collected so far, while over Rs 70 million remains unpaid.
Gandaki Province raises public transport fares after fuel price increase
The Gandaki Province Government has increased public transport fares following recent hikes in fuel prices. The fare revision was approved through a ministerial decision under Rule 76 of the Gandaki Province Vehicle and Transport Management Regulation 2024. Under the new rates, passengers travelling within Pokhara Valley on public buses for distances up to 20 kilometres will now pay Rs 24 for the first three kilometres. The previous fare adjustment was made in February 2022.
Customs clearance resumes in Rasuwa after agreement on MRP stickers
Customs clearance operations at Rasuwa Customs Office have resumed after being disrupted over the absence of Maximum Retail Price (MRP) stickers on imported goods. The process restarted after importers agreed to attach MRP stickers at their warehouses before products enter the market, as the policy could not be implemented immediately at the customs point. The customs office had resumed operations earlier this year following reconstruction of the Miteri Bridge after flood damage caused by the Lhende River in July 2025.
Mega College to host international commerce conference in Lalitpur
Mega College is set to organise the second international conference on contemporary commerce issues in Lalitpur on May 15 and 16 in collaboration with the Nepal Commerce Association. The conference will focus on innovation, sustainability and global competitiveness. According to the organisers, scholars, management experts, policymakers and students from Nepal, India and other countries will participate in the programme.
Agni Cement reports 46 percent rise in business turnover
Agni Cement Industries recorded a 46 percent increase in business turnover in 2025 compared to the previous year. The company reported transactions worth Rs 589 million during the last fiscal year, up from Rs 398 million in 2024. However, turnover had reached Rs 670 million in 2023. In the first eight months of the current fiscal year, the company reported transactions worth only Rs 119 million.
Yango Ride expands driver partner programme to Chitwan
Yango Ride has expanded its driver partner network programme beyond Kathmandu by inviting drivers from Chitwan and nearby districts to join Yango Pro. The programme was held at three locations in Chitwan and included driver registration, orientation sessions, interactive activities, promotional materials, fuel cards and gift distribution. Senior representatives from the company’s headquarters and local offices participated in the event.
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