KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic and policy developments reflect a mix of external geopolitical pressures and internal structural challenges. Regional tensions in West Asia are already affecting Nepal through disruptions in aviation, evacuation efforts for migrant workers, and consumer panic over LPG supplies, prompting emergency distribution measures by state agencies.
At the same time, domestic institutions are attempting to stabilize the economy through fiscal restraint, such as a reduced budget ceiling and flexible credit policies from the central bank to ease liquidity constraints for businesses. Persistent governance issues remain evident in regulatory disputes, prolonged infrastructure delays, and protests within key institutions, while concerns about transparency—from election expenses to lobbying within business bodies—continue to surface.
Together, these developments suggest an economy navigating short-term shocks and institutional weaknesses while attempting gradual reforms in financial regulation, public spending, and infrastructure management.
NOC to supply half-filled LPG cylinders to ease demand pressure
Nepal Oil Corporation (NOC) has decided to distribute half-filled 7.1-kg Liquefied Petroleum Gas (LPG) cylinders from today in response to a sharp rise in demand. The price of each half-cylinder has been fixed at Rs 955. Although LPG imports have not been disrupted, the corporation said panic buying and hoarding by consumers—triggered by fears of supply disruption due to tensions in the Middle East—have strained distribution. Shortages reported in India have further heightened concerns among consumers in Nepal. The temporary measure is intended to ensure fair distribution and prevent artificial scarcity. NOC has urged the public not to stockpile cylinders, stating that current supplies are adequate if distributed properly in Kathmandu Valley and other urban areas.
Gold and silver prices edge down in domestic market
Gold and silver prices recorded a slight decline in the domestic market on Friday compared to the previous day. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold dropped by Rs 2,800 per tola, while silver fell by Rs 20 per tola. Hallmark gold is now priced at Rs 314,200 per tola, and silver at Rs 5,495 per tola. On Thursday, gold had been traded at Rs 317,000 per tola and silver at Rs 5,515 per tola.
Finance Ministry sets Rs 18.9 billion ceiling for next budget
The National Planning Commission has fixed a budget ceiling of Rs 18.9 billion for the fiscal year 2026/27, representing a 4 percent reduction compared to the current fiscal year. Vice Chairman Dr. Prakash Shrestha said the cut reflects sluggish revenue growth and limited mobilization of foreign aid. Under the revised framework, the Ministry of Finance will prioritize projects that can begin implementation within a week of the budget’s approval. Revenue collection for the current fiscal year is projected at Rs 12.4 billion, and the government will need to achieve an 11 percent growth rate to reach the target of Rs 13.78 billion next year.
NRB allows rescheduling of working capital loans until July
Nepal Rastra Bank (NRB) has permitted banks and financial institutions to reschedule permanent working capital loans until July 16, the final day of the current fiscal year 2025/26. The central bank clarified that this one-time facility must be granted only after a thorough assessment of the borrower’s cash flow and financial records. NRB has also revised the utilization requirement for cash credit limits. Borrowers must now keep their loan usage below 30 percent of the approved limit for at least seven consecutive days once a year, compared to the earlier threshold of 10 percent. For productive industries, the ceiling for working capital loans remains at Rs 40 million to ensure continued access to financing for businesses facing liquidity constraints.
Election commission gives 35 days to disclose poll expenses
The Election Commission has instructed all candidates and political parties to make public their election expenditure within 35 days after the official announcement of results. In the case of the House of Representatives election held on March 5, candidates contesting under the first-past-the-post system must submit their expense reports to the respective District Election Offices, while political parties under the proportional representation system are required to report directly to the Commission. Joint Secretary Narayan Prasad Bhattarai said that failure to disclose financial details in accordance with Section 31 of the Election (Offenses and Punishment) Act 2017 will invite immediate legal action and penalties.
Nepal and India raise cross-border electricity tariff by 1.5 percent
The Power Exchange Committee (PEC) has agreed to increase the tariff for cross-border electricity trade between Nepal and India by 1.5 percent for the upcoming year. The agreement was led by Nepal Electricity Authority Executive Director Hitendra Dev Shakya without the involvement of Nepal Rastra Bank. Under the revised rate, Nepal will pay Rs 8.22 per unit starting in April, up from the current Rs 8.10. The arrangement guarantees a supply of up to 350 megawatts of electricity from the Indian states of Bihar and Uttar Pradesh, offering relief at a time when renewal of access to India’s Day-Ahead Market remains uncertain amid the West Asian energy crisis.
Qatar Airways plans 143 special repatriation flights
Qatar Airways has announced plans to operate at least 143 special flights between March 13 and March 18. Although Qatari airspace remains officially closed because of the ongoing regional conflict, the airline is arranging these flights to help repatriate citizens and residents stranded abroad. The schedule released on Friday prioritizes urgent travel within the region. However, the current flight list does not include Kathmandu, as the airline is focusing primarily on passengers directly affected by the conflict zone.
Regulatory commission schedules hearing on industrial electricity dues
The Electricity Regulatory Commission has fixed March 15 for a hearing on the long-standing dispute over dedicated and trunk line tariffs involving Panchakanya Plastic Industries and Panchakanya Steel. The companies have challenged the Nepal Electricity Authority’s decision to collect arrears related to past electricity usage and have also sought compensation. Lawyers representing both the Authority and the industries have been asked to attend the hearing. The proceeding is a prerequisite before either side can move the matter to court. The Commission will examine legal provisions and past precedents before deciding on the legitimacy of the premium tariffs that have long been disputed between the state utility and large industrial consumers.
SEBON staff resume protest on 172nd day
Employees of the Securities Board of Nepal (SEBON) have restarted their daily protests and pen-down strike after temporarily suspending the movement during the election period. The SEBON Employees Union said the demonstration, now entering its 172nd day, will include a daily one-hour sit-in from 10:00 am to 11:00 am. The decision to continue the agitation was taken on March 12 following the expiration of the election code of conduct. Staff members say they are pressing for administrative reforms and the resolution of long-standing internal issues that have affected the functioning of the regulatory body.
Nepal Airlines evacuates 272 nationals from Dubai
Nepal Airlines Corporation (NAC) brought back 272 Nepali citizens from Dubai International Airport on Thursday through a special evacuation flight. The operation followed a flight ban over much of West Asian airspace since February 28 after joint aerial attacks by the United States and Israel on Iran. According to spokesperson Devendra Pun, the aircraft had earlier carried 260 passengers from Kathmandu to Dubai. Another rescue flight is planned for Friday, which will transport 267 passengers to Dubai and return with 164 stranded Nepalis.
Regional tensions cancel 129 international flights at TIA
Restrictions on civil aviation across West Asia have resulted in the cancellation of 129 international flights at Tribhuvan International Airport between March 4 and March 12. Airport spokesperson Santosh Kumar Basnet said flights to Qatar and Kuwait have remained completely suspended since February 28. During this period, FlyDubai and Air Arabia operated 21 flights from the United Arab Emirates, while Himalaya Airlines managed only four departures. The airport estimates daily economic losses exceeding Rs 21 million, and thousands of passengers remain stranded as airlines await clearance to resume operations over Middle Eastern airspace.
CAAN introduces mandatory certificate for adventure aviation
The Civil Aviation Authority of Nepal (CAAN) has made it compulsory for operators of adventure flight activities to obtain a Recreational Aviation Operating Certificate (RAOC). Under the new regulation, companies organizing activities such as skydiving, heli-skiing and parasailing must first secure permission from the Ministry of Culture, Tourism and Civil Aviation before applying for the RAOC from CAAN. The authority said the policy is intended to strengthen safety standards and bring uniform regulation to the country’s growing recreational aviation sector. Organizations will not be allowed to conduct such activities without the required licenses.
FNCCI candidates accused of offering foreign trips to influence voters
Candidates contesting the upcoming Federation of Nepalese Chambers of Commerce and Industries (FNCCI) elections scheduled for April 11–12 are reportedly spending large sums to win voter support. One contender for the Commodity Vice President position has promised a four-night, five-day trip to Sri Lanka for around 130 voters along with their spouses, costing an estimated Rs 20 million. Other candidates are said to be arranging retreats in Sukute and luxury hotel stays in Kathmandu. Observers say the spending—estimated at roughly Rs 150,000 per voter—creates an uneven playing field that disadvantages smaller business representatives.
Proposal calls for reduction of 701 positions in Bagmati Province
A report submitted by the Administrative Restructuring Review Committee to Chief Minister Indra Bahadur Baniya has recommended downsizing the provincial government structure. The committee suggested reducing the number of ministries from 14 to eight and eliminating 701 staff positions. The panel, led by former Secretary Bimal Wagle, estimates that the reforms could save about Rs 485.6 million annually, amounting to nearly Rs 16.996 billion over the next 35 years. The report also proposes dissolving certain bodies, including the Provincial Dairy Development Board, to promote better governance and financial discipline.
Bank lending rises sharply in January after months of slow growth
Commercial banks significantly increased loan disbursements between mid-December 2025 and mid-January 2026, extending around Rs 1.05 billion in credit during that period. This contrasts sharply with the slow credit growth seen in the other months of the fiscal year, when total expansion over seven months reached only Rs 78 billion. Everest Bank CEO Sudesh Khaling said such spikes are typically linked to short-term overdrafts taken to pay taxes and banks attempting to meet sector-specific lending requirements before regulatory deadlines. As of February 12, total loans issued by commercial banks stood at Rs 5.157 trillion.
Authorities step up monitoring of LPG sales in Nawalparasi
The district administration in Nawalparasi (Bardaghat Susta Paschim) has intensified oversight of LPG distribution following rumors of possible shortages. Chief District Officer Deepak Raj Nepal instructed vendors to record buyer details and limit sales to one cylinder per customer. Inspection teams comprising representatives from the Industry and Commerce Association and the Consumer Rights Protection Forum have already visited facilities including Aarti Gas and Chandeshwori Gas. Officials said supply remains stable but warned against price manipulation. Security agencies have also been alerted after reports that some border-area traders were diverting gas supplies to Indian markets while limiting local availability.
Reconstruction work begins at Narayani stadium in Birgunj
Reconstruction of Narayani Stadium in Birgunj, Parsa, formally began on Friday with the demolition of 88 deteriorated parapets. Deepak Kumar Kanu, chairman of the Parsa District Sports Development Committee, said the federal government allocated Rs 40 million in the fiscal year 2025/26 budget for the first phase of the project. Originally built in 1985 with seating capacity for 35,000 spectators, the stadium has remained largely unused and poorly maintained for more than a decade. While current funds cover initial demolition and rebuilding, additional federal support is being sought to upgrade the venue to international standards.
Bids invited for four-lane expansion of Gorusinge–Chandrauta road
The Department of Roads has called for bids to upgrade the 19-kilometer Gorusinge–Chandrauta stretch into a four-lane highway. Companies interested in the project must submit proposals by May 4 along with a security deposit of Rs 162.6 million. Supported by a Rs 35 billion concessional loan from the World Bank, the project will also involve constructing eight bridges and seven wildlife underpasses to reduce environmental impact. The expansion forms part of the broader 69-kilometer Butwal–Gorusinge–Chandrauta road improvement initiative aimed at enhancing safety and traffic capacity on the East-West Highway.
Bheri river bridge contract scrapped after years of delay
The Road Division Office in Chaurjahari has canceled the contract for constructing a motorable bridge over the Bheri River linking Nalgad Municipality-10 and Aathbiskhot Municipality-5 after nearly nine years without progress. The project had been awarded to the joint venture Mrit Sanjeevani Galva in July 2016 but remained incomplete despite multiple deadline extensions. Division Chief Khum Bahadur Bhandari said a new bidding process cannot begin until the contractor clears pending penalties for delays. The prolonged procedural stalemate has frustrated residents who depend on the bridge to connect remote communities to the Bheri Corridor.
Mustang road project remains unfinished after eight years
Construction of the 17-kilometer road section between Kowang and Jomsom under the Beni–Jomsom–Korla project has stalled despite a contract signed eight years ago. The joint venture Pappu Gauri Parvati, Koshi and Neupane has yet to complete the final two kilometers of the Rs 700 million project. Project Chief Tejaswi Sharma said the contractor is currently paying daily fines equal to 0.05 percent of the contract value. If work does not resume before the mid-April deadline, the Kaligandaki Corridor Project Office plans to terminate the agreement and seek new bids.
Forest group launches organic fertilizer production
The Madhyabindu Collaborative Forest Management Group in Nawalparasi (Bardaghat Susta Purba) has begun producing organic fertilizer using forest undergrowth. According to chairman Bhagwan Khanal, clearing invasive plants helps improve forest health, reduce wildfire risks and generate local employment. The initiative aims to provide farmers with an organic substitute for chemical fertilizers while supporting sustainable agriculture. By turning forest waste into fertilizer, the project seeks to improve soil quality, increase crop productivity and create environmental and economic benefits for the local community.
Egg prices fall following drop in demand after elections
Egg prices have decreased across the country following a decline in consumption after the elections, according to the Nepal Poultry Federation. The price of extra-large eggs has been reduced by Rs 40 per crate to Rs 455. Large eggs now cost Rs 440 per crate after a Rs 35 drop, while medium eggs are priced at Rs 410. The federation said that despite daily production exceeding five million eggs, weaker demand after the election period required price adjustments in major markets including Kathmandu, Pokhara and Dhangadhi.
Sopan pharmaceuticals to issue IPO targeting migrant workers
Sopan Pharmaceuticals has received regulatory approval to issue 4.29 million shares worth Rs 429 million. In the initial phase beginning March 23, the company will allocate 429,000 shares specifically for Nepali citizens working abroad. Eligible investors can apply for a minimum of 10 shares and up to 11,000 shares at Rs 100 per share until March 26. NMB Capital has been appointed as the issue manager, and the offering has been assigned a Care-NP B rating by Care Rating Nepal.
Palpa cement IPO shares distributed to 450,000 applicants
Shares of Palpa Cement Industries Limited were allocated on Friday through a lottery system conducted by issue manager Nabil Investment Banking. Among 2,376,705 valid applicants, 450,000 investors were selected, each receiving 10 shares. The company operates a cement factory in Sunwal, Nawalparasi, with a daily production capacity of 2,200 tons. In the fiscal year 2024/25, it recorded a net profit of Rs 97.3 million and reported a net worth of Rs 135 per share. The IPO raised Rs 450 million to support the company’s production and export expansion.
Comment