KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape shows mixed signals, with strong external inflows and financial market stability contrasting with weak domestic investment and structural bottlenecks. The stock market closed the week with moderate gains, while remittances surged nearly 40 percent, boosting foreign exchange reserves and strengthening the government’s cash position.
Inflation remains relatively controlled despite rising food prices, but private sector credit growth is far below target, indicating subdued business confidence amid political uncertainty. At the same time, global geopolitical tensions are affecting Nepal through fuel supply disruptions, while regulatory actions in the financial sector highlight efforts to strengthen market transparency.
Meanwhile, slow capital spending, funding shortages, and project delays continue to hinder major infrastructure development, even as progress in hydropower, agriculture production, and IPO activity suggests pockets of economic momentum.
NEPSE closes week in positive territory with widespread gains
On Thursday, the Nepal Stock Exchange (NEPSE) index climbed 23.87 points (0.85 percent) to settle at 2,820.44, while the Sensitive Index advanced by 5.01 points (1.04 percent) to 486.38. Trading involved 41.69 million shares of 335 companies through 130,015 transactions, producing a turnover of Rs 14.551 billion. Share prices of 176 companies increased, 77 declined, and nine remained unchanged. Most sectoral indices posted gains, with Commercial Banks rising 2.02 percent, Finance 1.30 percent, and Development Banks 1.28 percent. However, Hotel and Tourism fell 0.35 percent, Non-life Insurance slipped 0.04 percent, and the Others group dropped 0.74 percent.
Gold and silver prices fall in local market
Precious metal prices declined in the domestic market on Thursday, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold prices fell by Rs 2,000 per tola compared to the previous day, while silver prices dropped by Rs 205 per tola.
Remittance inflows jump nearly 40 percent
Remittance earnings totaled Rs 1.261 trillion during the first seven months of the fiscal year, reflecting a 39.8 percent increase compared to the same period last year. According to Nepal Rastra Bank data, Rs 1.98 trillion entered the country between mid-January and mid-February alone. The surge boosted foreign exchange reserves to Rs 3.302 trillion, enough to finance imports for about 18 months. During this time, 245,153 Nepalis secured new labor permits while 227,424 renewed existing approvals. Inflation remained relatively moderate at 3.25 percent, lower than the 4.16 percent recorded a year earlier.
Govt treasury balance exceeds Rs 373 billion
Figures published by Nepal Rastra Bank (NRB) on Wednesday show that the government’s cash holdings reached Rs 373.73 billion by mid-February. The amount includes funds maintained in the accounts of federal, provincial, and local governments. At the end of the previous fiscal year in mid-July 2025, the balance had stood at Rs 149.83 billion, indicating a sharp rise in government liquidity within the first seven months of the current fiscal year.
Cabinet considers emergency funds for missions in West Asia
A proposal has been submitted to the Cabinet to allocate Rs 9 million in emergency support to nine Nepali diplomatic missions in West Asia. The plan suggests providing Rs 1 million to each mission to assist Nepali workers and professionals who may require urgent evacuation. Since the launch of an online registration portal, 63,577 Nepalis have registered for assistance, with more than 6,000 classified as high-risk. Recent rescue operations have already facilitated the return of 17 crew members from Doha, while 29 pilgrims from Saudi Arabia are expected to arrive in Kathmandu soon.
Consumer inflation rises to 3.25 percent in mid-February
Annual point-to-point consumer inflation increased to 3.25 percent between mid-January and mid-February, up from 2.42 percent in the previous month, according to Nepal Rastra Bank. Prices of food and beverages rose 2.50 percent, with vegetables increasing sharply by 11.63 percent. Meanwhile, prices of pulses and legumes declined by 5.19 percent. Regionally, Madhesh Province recorded the highest inflation at 5.14 percent, while Karnali Province had the lowest at 1.62 percent. Nepal’s inflation rate also remained higher than India’s 2.75 percent recorded in January.
Private sector credit growth limited to four percent
Credit expansion to the private sector reached only four percent during the first seven months of the fiscal year, well below the central bank’s 12 percent target. By mid-February, total lending stood at Rs 5.719 trillion, with only Rs 221 billion in new loans issued since July. Economists attribute the slow growth partly to the Gen Z protests in September, which caused damages estimated at Rs 84.45 billion and weakened investor confidence. Despite abundant liquidity and declining interest rates, businesses remain cautious about borrowing amid political uncertainty and past high-interest liabilities.
IEA plans major oil release amid Middle East tensions
The International Energy Agency (IEA) has agreed to release 400 million barrels of oil from emergency reserves to stabilize global supplies amid escalating tensions in the Middle East. Under the decision approved by 32 member countries, the United States will contribute the largest share—172.2 million barrels. IEA Executive Director Fatih Birol said the unprecedented measure aims to counter price spikes triggered by attacks near the Strait of Hormuz. Member countries collectively hold more than 1.2 billion barrels in emergency reserves.
SEBON penalizes three brokerage firms for AML violations
The Securities Board of Nepal (SEBON) has fined three brokerage companies a combined Rs 11 million for breaching the Anti-Money Laundering Act 2008. Cipla Securities received the largest penalty of Rs 5 million, while Shree Krishna Securities and Hatemalo Financial Services were each fined Rs 3 million. Regulators found the firms had violated Section 7, which requires strict compliance measures to prevent financial crimes. SEBON stated that maintaining transparency is essential to preserving trust in the Nepal Stock Exchange.
Hospitals instructed to supply medicines to insured patients
The Health Insurance Board has directed hospitals to stop asking insured patients to purchase medicines from outside pharmacies. Information Officer Bikesh Malla said some institutions were violating provisions of the Health Insurance Act 2018 by forcing patients to buy drugs separately in cash. Under the Health Insurance Regulations 2018, hospitals failing to comply may face legal action under Rule 18. The national insurance program currently covers up to Rs 100,000 for families of five who contribute Rs 3,500.
Ten brokerage firms fail to meet capital requirement
Ten stock brokerage companies have yet to comply with the Securities Board of Nepal’s minimum paid-up capital requirement of Rs 200 million. Despite receiving a nine-month extension that expires in April, several firms—including Arun Securities, Market Securities, and Creative Securities—still fall short. Although merger and acquisition guidelines were introduced in March 2025 to help firms increase capital, none of the non-compliant brokers have submitted formal restructuring plans so far.
Govt allocates Rs 140 million to repair minister residences
The Federal Secretariat Construction and Management Office has launched a project worth Rs 140 million to repair 11 ministerial residences in Bhaisepati that were damaged during the Gen Z protests. Since 23 of the 24 buildings were affected by arson, the government is also considering temporary housing arrangements for the new cabinet, including rented apartments or support for ministers living in private homes. Repairs are expected to be completed by July 2026.
Mining Department cautions against illegal gold exploration
The Department of Mines and Geology has warned companies against using heavy machinery or diverting river flows during gold exploration. Although licenses have been issued for more than 60 sites—including areas around the Kaligandaki and Budi Gandaki rivers—the department noted that some operators are violating the Mines and Minerals Act 1985. Reports indicate that certain firms have employed unauthorized foreign technicians and caused environmental damage. Authorities warned that such practices could lead to license cancellation and legal action.
Middle East conflict disrupts cooking gas supply in Nepal
Rising tensions in the Middle East have disrupted global fuel supply chains, leading to shortages of liquefied petroleum gas (LPG) in Nepal. The conflict involving the United States, Israel, and Iran has affected shipping through the Strait of Hormuz, impacting exports from the United Arab Emirates and Oman. As a result, long queues of consumers carrying empty cylinders have been seen at distribution points such as the Balaju Industrial Area. Although the Nepal Oil Corporation is coordinating with the Indian Oil Corporation, supplies remain limited.
Budget shortages delay national pride highway projects
Several national pride road projects—including the Mid-Hill Highway and the Postal Highway—are experiencing delays due to funding shortages. The Madan Bhandari Highway Project Directorate reported liabilities of Rs 14 billion but received only Rs 2.5 billion in this year’s budget. The Mid-Hill Highway project, ongoing for 18 years, has reached 84.69 percent completion.
Lumbini province records slow capital spending
Lumbini Province has spent only 20.97 percent of its Rs 23.471 billion capital budget in the first seven months of the fiscal year. Overall expenditure, including recurrent spending and grants, stands at Rs 9.2 billion—23.65 percent of the total annual budget of Rs 38.91 billion. The Ministry of Youth and Sports recorded the lowest capital expenditure at just 0.04 percent, while the Ministry of Health led spending due to payments for hospital construction.
Postal Highway faces over Rs 10 billion liability
The Postal Highway project, stretching 1,857 kilometers across 21 districts, remains unfinished 16 years after construction began. Progress currently stands at 74.35 percent, with 1,380 kilometers blacktopped and 153 of the planned 300 bridges completed. The project still requires about Rs 27 billion to finish remaining works and currently has outstanding liabilities of Rs 10.05 billion.
Nepal’s first extra-dosed cable bridge reaches 57 percent completion
Construction of the Seti River bridge in Pokhara under the Mugling-Pokhara road expansion has reached 57 percent completion. The Rs 1.07 billion project, supported by the Asian Development Bank, features Nepal’s first extra-dosed cable-stayed bridge design with twin 190-meter structures.
Corridor projects face delays and rising costs
Major corridor road projects—including the Koshi, Kaligandaki, and Karnali corridors—are progressing slowly and have undergone cost revisions. The Koshi Corridor has achieved only 46 percent progress and its deadline has been extended to 2028/29. The Karnali Corridor shows the slowest progress at just 20.5 percent.
Nepal Airlines suspends flights to Resunga due to smog
Nepal Airlines Corporation has temporarily halted flights to Resunga Airport in Gulmi due to persistent smog and poor visibility. Flights scheduled earlier in the week were canceled after weather conditions made operations unsafe.
Buddha Air retires long-serving ATR-72 aircraft
Buddha Air has retired its ATR-72 aircraft with call sign 9N-AJO after completing its maximum design life of 72,000 flight cycles. Since entering service in July 2010, the aircraft carried over 2.48 million passengers before its final flight from Bhairahawa to Kathmandu on March 9, 2026.
Upper Thulokhola hydropower begins test production
The 22.5-megawatt Upper Thulokhola Hydropower Project in Myagdi has completed construction and started test generation. Developed at an estimated cost of Rs 3 billion, the project will connect to the national grid through the 220 kV Dana-Khurkot transmission line.
Madhesh Province expects Rs 40 billion in mango revenue
Authorities estimate that mango production in Madhesh Province will reach around 400,000 metric tons this year, valued at roughly Rs 40.40 billion. The province currently accounts for about 76 percent of Nepal’s total mango output.
First flush tea harvest begins in Ilam and Panchthar
The season’s first flush tea harvest—considered the highest-quality production—has started in Ilam and Panchthar districts. Initial harvesting has begun in areas such as Soyak and Chilimkot, producing around 250 kilograms so far.
Marsyangdi hydropower plant resumes generation after maintenance
The 69-megawatt Marsyangdi Hydropower Center has resumed electricity production after a 21-day maintenance shutdown. Technicians repaired key infrastructure, including the under-sluice gate that had remained nonfunctional for 14 years.
Early paddy cultivation declines in Kanchanpur
The area used for early spring paddy cultivation in Kanchanpur has fallen sharply from 400 hectares to just 150 hectares. Farmers cite insufficient irrigation water, drought conditions, and damage from stray cattle as major reasons.
Dhaulagiri microfinance skips dividend distribution
Dhaulagiri Microfinance Financial Institution has decided not to distribute dividends from last fiscal year’s profits. Instead, the company plans to retain earnings to strengthen reserves and maintain capital adequacy.
Snow Rivers company to issue IPO for locals
Snow Rivers Company will open an initial public offering on March 23 targeting local residents and Nepali migrant workers. The company plans to issue 1.875 million shares worth Rs 187.5 million, representing 20 percent of its total capital.
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