KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economic landscape presents a mixed picture, with signs of sustained market activity and long-term investment alongside persistent structural weaknesses. While stock market turnover remained strong despite a marginal decline in the NEPSE index, and the central bank continued liquidity management through a Rs 60 billion deposit collection instrument, concerns over weak capital expenditure, last-minute government spending, and funding shortages for key infrastructure projects point to ongoing inefficiencies in public financial management.
At the same time, progress in regional energy cooperation, hydropower development, skilled labour migration, and business reform initiatives signals efforts to strengthen the country’s long-term growth prospects. However, uneven provincial budget execution, procurement-related governance issues, and operational bottlenecks in sectors such as aviation and infrastructure underscore the need for more effective policy implementation and institutional reforms to sustain economic momentum.
NEPSE slips marginally despite higher trading volume
The Nepal Stock Exchange (NEPSE) declined by 1.13 points, or 0.04 percent, on Friday to close at 2,600.78, extending its weekly losing streak. The Sensitive Index also fell 0.58 points to 453.60. Trading activity, however, increased significantly, with 10.66 million shares of 367 listed companies changing hands through 53,432 transactions worth Rs 6.86 billion, up from Rs 4.61 billion the previous day. Share prices of 120 companies gained, while 135 declined and 19 remained unchanged. Aatmanirbhar Laghubitta Bittiya Sanstha recorded the highest gain at 10.66 percent, whereas Bhagawati Hydropower Development Company posted the steepest decline, dropping 7.84 percent.
Gold and silver prices rise
Gold and silver prices increased in the domestic market on Friday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold rose by Rs 2,700 per tola (11.66 grams) to Rs 287,400, up from Rs 284,700 on Thursday. Silver also recorded gains, increasing by Rs 170 per tola to Rs 4,510 from the previous day’s Rs 4,340.
NRB invites bids for Rs 60 billion deposit collection instrument
Nepal Rastra Bank (NRB) on Friday invited bids for a Rs 60 billion deposit collection instrument as part of its liquidity management operations. The 19-day instrument was offered through the central bank’s Online Bidding System Software (OBSS), with the bidding process closing at 3:00 pm. The instrument was issued the same day, while both principal and interest are due to be repaid on October 9. The interest rate will be determined through competitive bidding. Participation was limited to NRB-licensed Class A, B and C banks and financial institutions, with a minimum bid size of Rs 100 million.
EU launches €5 million regional electricity connectivity initiative
The European Union on Friday launched a four-year regional energy connectivity programme worth €5 million to strengthen cross-border electricity trade across South Asia. The project, managed by Expertise France, covers Nepal, India, Bangladesh, Bhutan and Sri Lanka. Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha said the initiative supports Nepal’s target of generating 28,500 MW of hydropower by 2035. The programme aims to harmonize regional energy policies, finance joint technical studies and provide participating countries with access to European power grid management practices to help reduce greenhouse gas emissions.
Govt clears over Rs 33 billion in payments on fiscal year’s final day
The government released more than Rs 33.16 billion in payments on the final legally permitted day of the fiscal year to settle pending bills before the regular payment system was suspended. The disbursement included Rs 12.42 billion for recurrent expenditure, Rs 2.35 billion for debt servicing and Rs 18.39 billion for capital expenditure, with the latter accounting for nearly 10 percent of the year’s total infrastructure spending. Despite the surge in last-day payments, the government utilized only 44.51 percent of its capital budget, amounting to Rs 181.56 billion, while overall expenditure reached 79.69 percent, or Rs 1.56 trillion, of the annual target. Under fiscal management rules, the payment system remains closed during the final week of the fiscal year, except for verified outstanding obligations that can be settled under strict supervision.
Madhesh Province spends 56 percent of annual budget
Madhesh Province utilized 56.31 percent of its budget during the fiscal year 2025/26, spending Rs 26.456 billion out of an allocation of Rs 46.983 billion, according to the Province Treasury Controller Office. Recurrent expenditure reached 60.69 percent, with Rs 9.491 billion spent from a budget of Rs 15.638 billion. Capital expenditure stood at 54.12 percent, amounting to Rs 16.965 billion out of Rs 31.345 billion. Among provincial agencies, the Ministry of Health and Population recorded the highest budget utilization at 71.45 percent, while the Office of the Chief Minister and Council of Ministers had the lowest at 36.06 percent. The Provincial Assembly spent 68.60 percent of its allocated budget, and the Provincial Public Service Commission recorded 65.60 percent expenditure.
Initial studies begin for Rs 55 billion Upper Mugu Karnali hydropower project
The Department of Electricity Development on Friday initiated environmental impact assessments and feasibility studies for the proposed Upper Mugu Karnali Hydropower Project through a public notice. According to Elevate Energy Chief Executive Officer Prabin Aryal, the run-of-river project is expected to generate 306 MW of electricity. The project is estimated to cost Rs 55.33 billion and will use four vertical-axis Pelton turbines to produce around 1,629 GWh of electricity annually. The generated power will be transmitted through a 55-kilometre double-circuit transmission line to the Phukot Hub Substation, with completion targeted for August 2033.
Lumbini Province achieves 67 percent budget implementation
Lumbini Province implemented 67.18 percent of its fiscal budget by July 9, according to financial data released by the Ministry of Economic Affairs and Planning and the Provincial Accounts Comptroller Office. The province spent Rs 26.142 billion from a total budget of Rs 38.91 billion. Recurrent expenditure reached Rs 10.462 billion, or 67.76 percent of the allocation, while capital spending stood at Rs 15.677 billion, representing 66.80 percent. The Ministry of Health recorded the highest budget execution rate among provincial ministries at 79.38 percent.
Ministry resumes processing of South Korea’s E-7 skilled worker visas
The Ministry of Youth, Labour and Employment has resumed processing applications under South Korea’s E-7 skilled worker visa programme following legal clearance from the Patan High Court. Joint Secretary Pitambar Ghimire said on Friday that the ministry had forwarded the required labour documents to the Ministry of Foreign Affairs, allowing licensed recruitment agencies to begin selecting applicants. The programme had previously been suspended following intervention by the Commission for the Investigation of Abuse of Authority, but a recent court order reinstated the scheme under the Skilled Labour Guidelines, 2023.
FNCCI calls for implementation of key economic reforms
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged Prime Minister Balendra Shah to implement a series of legal and policy reforms aimed at improving the business environment. During a meeting on Wednesday, the federation called for the enforcement of provisions related to the repeal of the Black Marketing Act, as well as the implementation of the proposed Sunset Law, Debt Recovery Act and Intellectual Property Protection Act. FNCCI representatives said the private sector contributes 81 percent of Nepal’s economic output and provides 86 percent of total employment but is facing weak consumer demand. They also proposed introducing a Unified Tax Code to streamline provincial taxation and reduce production costs.
Land survey agreement settles long-running Birgunj road dispute
The District Administration Office in Parsa has reached an agreement aimed at resolving a long-standing dispute over the alignment of the Tribhuvan Highway near Ghantaghar in Birgunj. Chief District Officer Bhola Dahal chaired a four-hour meeting involving multiple stakeholders, during which officials agreed to use the official 1989/90 cadastral maps as the legal basis for the survey. Technical teams from Birgunj Metropolitan City and the Survey Department will now demarcate an 8.6-metre-wide corridor between Ghantaghar and the Nepal Telecom office. Property owners affected by the demarcation will be given time to remove structures encroaching on the designated area after the final boundary markers are installed.
Temporary entry passes introduced for Indian vehicles in Thori
The Birgunj Customs Office has introduced a temporary entry pass system for Indian vehicles operating in Thori to ease cross-border transport disruptions. Effective from July 7, two officials have been deployed at the Thori Sub-Customs Office to issue the passes free of charge. The temporary arrangement allows Indian vehicles to operate within the Thori area until a permanent mechanism is put in place. The measure follows concerns raised in the House of Representatives over restrictions on the movement of Indian vehicles. Customs officials said the concerned ministry has also been informed for further policy decisions.
Funding shortage delays completion of Lamahi Trauma Center
Construction of the 50-bed Lamahi Trauma Center in Lumbini Province has slowed because of a shortage of funds. The project, being developed as a provincial priority, began on April 14 under a contract worth Rs 194.1 million awarded to Lama and Gaurishankar Himalayan Construction Pvt. Ltd. Although about 80 percent of the physical work has been completed, finishing works, including painting, interior construction and medical utility installations, have stalled. The Urban Development and Building Office said the project requires an additional Rs 70 million for completion, but only Rs 30 million has been allocated in the current fiscal year.
Irregular flights reduce aviation fuel sales at Tarigaun Airport
Inconsistent flight operations at Tarigaun Airport have continued to affect aviation fuel sales, according to the Nepal Oil Corporation. Depot Accounting Officer Kailash Devkota said the depot sold 1,000 litres of aviation fuel between mid-April and mid-May, 660 litres from mid-May to mid-June, and 834 litres so far since mid-June. Despite weak monthly demand, annual fuel sales nearly doubled from 17,909 litres in fiscal year 2024/25 to 34,340 litres in 2025/26. Devkota attributed the sluggish sales to airlines frequently cutting weekly services from four flights to two, even though aviation fuel is currently priced at Rs 269 per litre.
Lock-in period ending for Reliable Nepal Life Insurance shares
Reliable Nepal Life Insurance Company has announced that the mandatory lock-in period for a large portion of its shares will expire on August 15. The expiry applies to 37,157,120 shares registered with the Securities Board of Nepal, out of the company’s total 51,968,000 shares, including bonus shares. The shares becoming eligible for trading include 36,377,600 founder shares and 779,520 shares held by employees. Once the lock-in period ends, eligible shareholders will be able to trade or transfer their holdings on the secondary market.
Govt blacklists 10 firms from public procurement
The Public Procurement Monitoring Office has blacklisted 10 construction and supply companies, prohibiting them from participating in public procurement, bidding and government construction projects for periods ranging from one to three years. Among those receiving the maximum three-year ban are Mahadev Khimti Nirman Sewa, owned by former Federation of Contractors’ Associations of Nepal (FCAN) President Rabi Singh, its joint venture Pappu-Mahadev JV, and Shrestha Construction Company, based on recommendations from the Postal Highway Directorate in Itahari. Other blacklisted firms include Global Drugs Suppliers Bharat-Siddhasai, Lumbini Motors and Pump Industries, Hira Nepali Nirman Sewa, Mayumi Construction and Shubham Nirman Sewa. During the blacklist period, the companies will be barred from participating in procurement processes conducted by any public entity.
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