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 but broadly constructive picture of Nepal’s economy, where ongoing financial reforms, infrastructure investment, and tourism growth are being offset by inflationary pressures and external-sector weaknesses.
The modest recovery in NEPSE, despite lower turnover, suggests cautious investor sentiment, while NRB’s absorption of Rs 60 billion in excess liquidity and rising inflation to 5 percent indicate growing monetary management challenges.
Large-scale infrastructure initiatives, including the MCA-Nepal transmission project and accelerated repairs at the Rasuwagadhi Hydropower Project, underscore continued efforts to strengthen the country’s energy sector, complemented by policy proposals to improve hydropower licensing efficiency.
Strong tourism-related indicators—such as Rs 1.26 billion in mountaineering revenue and the launch of daily Flydubai flights to Pokhara—highlight opportunities for foreign exchange earnings and regional economic growth.
At the same time, declining tourism receipts, a widening service-sector deficit driven by overseas education spending, delays in agricultural support pricing, and rising living costs point to persistent structural vulnerabilities. Meanwhile, stricter enforcement of unpaid industrial and health-sector dues, expansion of farmer registration systems, and ongoing asset disclosure investigations reflect a broader government push toward improved governance, accountability, and formalization of economic activity.
Overall, Nepal appears to be advancing its long-term development and reform agenda, but sustaining momentum will require balancing inflation, boosting export-oriented earnings, and improving policy execution across key sectors.
NEPSE gains 2.57 points as turnover declines to Rs 4.29 billion
The Nepal Stock Exchange (NEPSE) recorded a modest rebound on Tuesday, advancing 2.57 points to close at approximately 2,736 after four consecutive sessions of decline. Despite the recovery in the benchmark index, daily turnover dropped significantly to Rs 4.29 billion from Rs 6.44 billion in the previous trading session. Market performance was mixed, with 127 stocks gaining, 134 declining, and 10 remaining unchanged. Sectoral movements remained limited, with most indices fluctuating within a 1 percent range. Banking stocks edged up by 0.07 percent, while the Hydropower and Hotel and Tourism sectors rose by 0.65 percent and 0.54 percent, respectively. Microfinance and insurance stocks ended lower. Newly listed companies, including Sopan Pharmaceuticals, Kalinchowk Hydropower, and Apollo Hydropower, reached the 15 percent upper circuit limit, while Saptakoshi Development Bank and Bungal Hydropower also posted notable gains. Upakar Microfinance emerged as the session’s biggest loser, dropping 8.71 percent.
Gold falls to Rs 291,800 per tola, silver drops to Rs 4,740
Gold and silver prices declined sharply in Nepal’s domestic market. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold dropped by Rs 10,100 per tola (11.66 grams) to Rs 291,800, down from Tuesday’s record high of Rs 301,900 per tola. Silver also recorded a significant decline, falling by Rs 180 per tola to Rs 4,740, compared with Rs 4,925 in the previous trading session.
NRB absorbs Rs 60 billion in excess liquidity
Nepal Rastra Bank (NRB) carried out a liquidity management operation by withdrawing Rs 60 billion from the banking system through its deposit collection facility. Commercial banks and financial institutions with surplus funds participated in the competitive bidding process, which required a minimum bid size of Rs 100 million and additional bids in multiples of Rs 50 million. Participation was restricted to licensed Class “A,” “B,” and “C” financial institutions. The central bank fixed the maturity period at 23 days, with principal and interest payments scheduled for settlement on July 3.
MCA-Nepal begins transmission line construction
The Millennium Challenge Account Nepal (MCA-Nepal) has officially commenced construction of its major electricity transmission infrastructure project, including the Ratamate and New Damauli substations and a 297-kilometer transmission network. The project is financed through a USD 550 million grant provided by the Millennium Challenge Corporation (MCC) of the United States and a USD 197 million contribution from the Government of Nepal. The initiative includes the construction of three 400 kV substations and multiple transmission corridors, including the Lapsiphedi–Ratamate–New Hetauda and New Damauli–New Butwal sections, with the objective of improving power transmission efficiency and reducing network bottlenecks.
Retail inflation reaches 5 percent in May
According to the latest macroeconomic data released by Nepal Rastra Bank, year-on-year consumer inflation rose to 5.04 percent during the first ten months of fiscal year 2025/26, compared with 2.77 percent during the same period a year earlier. Inflation in non-food goods and services stood at 5.26 percent, while food and beverage prices increased by 4.63 percent. The rise was driven largely by an 18.6 percent increase in fruit prices and a 15.3 percent rise in transportation costs. Among the provinces, Koshi Province recorded the highest inflation rate at 5.64 percent. In comparison, India’s inflation rate remained relatively lower at 3.48 percent.
Finance Minister alleges organized campaign of misinformation
Finance Minister Swarnim Wagle has claimed that a coordinated effort is underway to spread misinformation against him and the recently announced budget. Speaking during a budget discussion organized by the Finance Committee of the House of Representatives, he stated that parliamentary deliberations had been overshadowed by allegations and rumors instead of substantive debate on fiscal policies. Wagle said he attended the committee meeting specifically to address concerns and provide clarification regarding the claims being circulated.
Property Inquiry Commission extends asset disclosure deadline to July 16
The Property Inquiry Commission has extended the deadline for current and former public officials to submit details of their assets until July 16, granting an additional month to facilitate documentation. The extension follows requests from individuals who reported difficulties gathering the required records within the previous timeframe. To date, the commission has received more than 3,500 asset declarations and over 60 complaints. The inquiry covers individuals who served in public positions between 1991 and 2026, including elected officials, senior civil servants, constitutional officeholders, and employees of public institutions. Authorities estimate that between 40,000 and 50,000 asset disclosures may eventually be collected.
Committee recommends cancellation of inactive hydropower licenses
A high-level review committee has submitted recommendations to the Ministry of Energy, Water Resources, and Irrigation calling for major reforms in Nepal’s hydropower licensing framework. The panel proposed using provisions of the Electricity Act, 1992, to revoke licenses of developers who have secured Power Purchase Agreements (PPAs) but failed to begin construction activities. It also recommended reducing institutional overlap among the Investment Board Nepal, the Ministry of Industry, and the Ministry of Energy. In addition, the committee advocated replacing the existing first-come, first-served licensing approach with a competitive bidding system under a unified National Electricity Development Plan.
Around 2.5 million farmers registered in national database
Approximately 2.5 million farmers have been enrolled in the government’s national farmer registration system, which is designed to improve the delivery of agricultural services, subsidies, and support programs. The registration process is based on land ownership and production records. According to the Agriculture Information and Training Center, the database will help improve targeting and efficiency in government support mechanisms. With Nepal’s farmer population estimated at around 4.1 million under the Agriculture Census 2022, efforts are ongoing to register the remaining farmers. Once completed, participants will be categorized by scale of operation, and farmer identity cards will be introduced as part of a broader digital agriculture information system.
Flydubai to launch daily Pokhara–Dubai flights from September 23
Flydubai will begin operating daily flights between Dubai and Pokhara International Airport starting September 23 after receiving approval from the Civil Aviation Authority of Nepal. Airport officials said the flight schedule was approved following a recent operational assessment. Local authorities and tourism stakeholders view the new service as an important milestone in establishing Pokhara as Nepal’s third international aviation gateway. The route is expected to connect Pokhara with more than 300 global destinations through Dubai, potentially boosting tourism, investment, and international connectivity.
Tourism earnings decline as service sector deficit widens
Tourism revenue fell by 2.2 percent during the first ten months of fiscal year 2025/26, while Nepal’s net service income remained in deficit at Rs 68.22 billion, according to Nepal Rastra Bank. Tourism earnings totaled Rs 74.18 billion during the review period, down from Rs 75.83 billion in the corresponding period of the previous fiscal year. Expenditure on foreign travel also decreased by 3.4 percent to Rs 177.87 billion. However, travel-related spending continued to significantly exceed tourism earnings, contributing to the service sector deficit. The report further noted that expenditure on overseas education increased to Rs 120.50 billion from Rs 112.39 billion a year earlier, making it one of the largest contributors to the widening deficit.
Spring mountaineering season generates over Rs 1.26 billion in revenue
The Department of Tourism concluded the spring mountaineering season with government revenue totaling Rs 1.264 billion, generated from 1,195 registered climbers from Nepal and abroad. Official data shows that 495 climbers from 56 countries obtained permits to scale Mount Everest, with Chinese climbers accounting for the largest national group and recording 109 successful summits. Permit fees for Everest alone contributed Rs 1.081 billion to government earnings, while additional revenue was generated from climbing permits for Mount Lhotse, Makalu, and Ama Dablam. The season also saw experienced Nepali guides achieve new records for cumulative high-altitude ascents.
Industrial firms settle dues after government warning
The Ministry of Industry, Commerce, and Supplies reported a sharp improvement in rent collections after issuing enforcement notices to companies with overdue payments in the Balaju Industrial Estate. Within a day of receiving warnings about possible asset seizures, utility disconnections, and facility closures, 12 manufacturing companies cleared outstanding rental obligations. Authorities have provided more than 300 defaulting firms with a one-week deadline to submit proof of payment, warning that non-compliant businesses could face permit cancellations and closure of industrial facilities.
Repair work accelerates at Rasuwagadhi Hydropower Project
Restoration efforts have intensified at the 111 MW Rasuwagadhi Hydroelectric Project following extensive damage caused by flash floods originating from the Lhende River. Project records indicate that key infrastructure, including headworks, intake structures, and access bridges, sustained significant damage, forcing a complete halt in electricity production at the Rs 23.73 billion facility. Engineering teams have since removed accumulated sediment from desilting chambers and headrace tunnels and have resumed testing operations on three Francis turbines as part of efforts to restore generation capacity.
Eleven health institutions face action over unpaid fees
The Ministry of Health and Food Safety has initiated action against 11 health institutions for failing to pay mandatory fees linked to bed-capacity regulations. Authorities have ordered the recovery of Rs 17.8 million in outstanding payments as part of broader efforts to improve governance, transparency, and regulatory compliance within the healthcare sector. The decision follows findings from the Office of the Auditor General, which identified unpaid obligations among several health facilities. Officials confirmed that the recovery process is now underway.
Shuklaphanta promotes commercial vermicompost production
Shuklaphanta Municipality has launched a program to encourage commercial vermicompost production under its “One Ward, One Enterprise” initiative. The project aims to help farmers reduce dependence on chemical fertilizers by adopting organic waste recycling techniques. Municipal authorities, working with agricultural and environmental organizations, have conducted practical training programs on composting methods that preserve soil nutrients. According to municipal records, 28 vermicompost production units have been established in Shuklaphanta-9, while subsidy programs have been expanded to improve access to farming equipment and promote sustainable agricultural practices.
Chitwan farmers disappointed by delay in minimum support price
Farmers in Chitwan District have expressed frustration over delays in the implementation of the government’s minimum support price for spring paddy, commonly known as Chaite paddy. Agricultural groups estimate that crops cultivated on roughly 1,000 hectares were sold without benefiting from the guaranteed price mechanism. Farmers in Khairahani Municipality have been particularly affected. Officials from the Agriculture Development Office attributed the issue to delays in the government’s approval process, despite approximately 9,000 hectares of spring paddy being cultivated across the district this year.
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