KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economic outlook presents a mixed picture, combining positive financial market performance and expanding investment initiatives with mounting fiscal pressures and infrastructure vulnerabilities. The NEPSE index gained 21.32 points, with Rs 4.13 billion in turnover and all sectoral indices closing higher, indicating positive investor sentiment. However, declining gold and silver prices suggest adjustments in the domestic precious metals market.
The August 26 floods have emerged as a major economic concern, damaging hydropower facilities, disrupting trade routes and creating reconstruction requirements estimated at Rs 723 billion. The government faces slower revenue growth and has projected economic expansion of 3.5–4 percent for fiscal year 2026/27. Although Rs 17.75 billion has been collected in disaster relief funds and Rs 559.72 billion has been proposed for reconstruction, effective fund allocation and timely implementation remain critical challenges.
Meanwhile, Nepal Rastra Bank’s initiatives to support fintech innovation and strengthen coordination against cyber fraud indicate growing attention to financial modernisation and security. Plans to expand electricity trading and cross-border power capacity offer further opportunities for investment and economic growth.
Persistent weaknesses remain evident in public spending, with more than 30 percent of annual capital expenditure occurring in the final month of fiscal year 2025/26. Rising festive travel costs and transport disruptions also highlight pressure on household budgets. Overall, Nepal’s economic recovery will depend on effective reconstruction, disciplined public spending, resilient infrastructure and stronger private-sector investment.
NEPSE gains 21.32 points as turnover reaches Rs 4.13 billion
The Nepal Stock Exchange (NEPSE) index rose by 21.32 points to close at 2,621.26 points on Wednesday, October 14, as total daily turnover reached Rs 4.13 billion. A total of 11.6 million shares were traded through 39,183 transactions involving 354 listed securities. Market sentiment remained positive, with share prices of 188 companies increasing, 80 declining and nine remaining unchanged. Siddhartha Bank debentures recorded the highest gain, rising by 13.21 percent. Kumari Bank led turnover with transactions worth Rs 264.6 million, followed by Ghalemdi Hydro Power at Rs 216 million. Banking, development banking and non-life insurance indices each gained more than 1 percent. All sectoral indices closed in positive territory.
Gold falls by Rs 2,700 per tola, silver drops to Rs 4,255
Gold and silver prices declined in Nepal’s domestic market on Wednesday, with gold falling by Rs 2,700 per tola and silver dropping by Rs 100 per tola. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold was being traded at Rs 289,500 per tola, down from Rs 292,200 on Tuesday. Silver prices also declined, falling to Rs 4,255 per tola from Rs 4,355 on the previous trading day. The latest rates reflect a downward movement in the domestic precious metals market.
Finance Ministry warns of revenue pressures and slower economic growth
The Ministry of Finance has projected increased fiscal pressure and weaker revenue collection in the current fiscal year 2026/27 following the devastating flash floods in the Bhote Koshi area on August 26. In its annual economic bulletin for fiscal year 2025/26, the ministry said relief and reconstruction costs would place considerable pressure on public finances. Revenue collection is also expected to suffer due to tax exemptions and the closure of the Rasuwagadhi and Tatopani border crossings. The floods damaged hydropower facilities with a combined capacity of 431 megawatts, equivalent to around 10 percent of Nepal’s total installed electricity generation capacity. Reconstruction requirements have been estimated at Rs 723 billion, or approximately 11 percent of gross domestic product (GDP). The ministry has lowered its economic growth projection to between 3.5 and 4 percent. The projection is below the World Bank’s estimate of 3.7 percent at the lower end and the Asian Development Bank’s forecast of 4.1 percent.
NRB’s Digital Finance Innovation Hub engages 50 fintech startups
Nepal Rastra Bank’s (NRB) Digital Finance Innovation Hub has brought 50 fintech businesses, technology startups and individual innovators into its collaborative regulatory sandbox to promote innovation and improve regulatory clarity in digital finance. According to the central bank’s annual impact assessment report, the participants include 30 unregistered fintech startups, eight payment system operators, four licensed banks and financial institutions, three payment service providers and three independent innovators. Of the proposals submitted, 12 focus on payment infrastructure, 11 on digital credit, seven on credit scoring, five on embedded finance and four on open banking. The hub evaluated 20 preliminary proposals, provided formal regulatory guidance to three enterprises and addressed legal ambiguities to facilitate the commercial implementation of innovative financial services.
NRB directs banks to appoint focal persons to handle holiday cyber fraud
Nepal Rastra Bank (NRB) has instructed banks and financial institutions to designate focal persons to respond to cyber fraud cases during the public holidays of Dashain, Tihar and Chhath. The measure aims to strengthen coordination between financial institutions and Nepal Police, enabling suspected fraudulent transactions to be identified quickly and funds in suspicious accounts to be frozen without unnecessary delays. The central bank has directed licensed Class A, B and C banks and financial institutions to submit the names, designations and mobile numbers of their designated contact persons to Nepal Police Headquarters at [email protected]. They must also provide an email address that can be monitored around the clock or used to respond to requests on an on-call basis. NRB said timely communication between banks and law enforcement agencies is particularly important during public holidays, when cyber fraud incidents may require immediate intervention and investigation.
Govt prepares to issue letters of intent to private electricity traders
The government is preparing policy arrangements to issue letters of intent to private companies seeking to trade electricity, Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha announced on Wednesday, October 14. Reviewing the ministry’s achievements over the past six months, Shrestha said the required commercial operation dates for 27 hydropower projects with a combined capacity of 540.47 megawatts had been extended. Nepal and India have also agreed to increase cross-border electricity import capacity from 1,000 megawatts to 1,400 megawatts and export capacity from 1,100 megawatts to 1,650 megawatts. On transmission infrastructure, the ministry has completed the 400-kilovolt Bahrabise–Lapsiphedi transmission line and advanced work on 12 other transmission lines, according to the report. The ministry has also expanded irrigation coverage and registered a renewable energy bill in the House of Representatives. In addition, Rs 500,000 each has been provided to the families of six missing Nepal Electricity Authority employees.
Disaster council recommends Rs 559.72 billion for flood reconstruction
The National Disaster Risk Reduction and Management Council has recommended Rs 559.72 billion for 504 reconstruction projects to restore infrastructure damaged by severe monsoon floods across the Bhote Koshi, Kali Gandaki and Budhi Gandaki river basins. The proposal was submitted to the Ministry of Finance for budgetary approval following the council’s 21st meeting. The recommended allocation includes Rs 418 million for immediate restoration of communication services, including mobile base transceiver station (BTS) towers and satellite backup systems. A further Rs 452.4 million has been proposed for medium- and long-term telecommunications projects. For agricultural and forestry rehabilitation, the council has proposed Rs 218.2 million for immediate recovery and Rs 993.7 million for longer-term restoration. Meanwhile, the water resources ministries have requested Rs 606.8 million to rebuild hydrological monitoring stations and Rs 193.95 billion for structural flood-control and irrigation projects. The proposed funding package is intended to support the restoration of essential infrastructure and strengthen resilience against future disasters.
Disaster relief funds total Rs 17.75 billion
The government has collected a total of Rs 17.75 billion in funds intended to support people affected by floods in the Bhote Koshi–Trishuli river system. According to the Office of the Prime Minister and Council of Ministers, the amount has been deposited in various bank accounts maintained for natural disaster response and relief. Of the total, Rs 13.23 billion is held in nine accounts at different commercial banks. Accounts maintained at Himalayan Bank and Laxmi Sunrise Bank contain an additional US$29.747 million. The funds are intended to support financial assistance and relief efforts for communities affected by the devastating floods.
Govt launches infrastructure programme for 109 community schools
The government has launched an infrastructure development programme targeting 109 community schools across Nepal to accommodate rising student enrolment and improve educational facilities. Minister for Education and Sports Sasmit Pokharel said Rs 6.54 billion had been allocated in the current fiscal year for school infrastructure development. The targeted schools have more than 2,000 students and have demonstrated strong results in the Secondary Education Examination (SEE). In the first phase, Rs 5.34 billion has been allocated to 89 schools to accelerate the construction of modern, three-storey buildings with 12 rooms each. Each building is estimated to cost around Rs 60 million. The new facilities will include classrooms, laboratories and libraries designed to improve the learning environment. Pokharel said the government aims to reduce disparities among public schools and called for collective efforts to improve the overall quality of education nationwide.
Dashain travellers face air ticket shortages and rising fares
Passengers travelling from Kathmandu to their home districts for Dashain are facing shortages of domestic air tickets and high fares, amid road disruptions caused by recent floods and landslides. Despite a directive issued by Culture, Tourism and Civil Aviation Minister Khadak Raj Paudel on October 8, following Prime Minister Balendra Shah’s instruction to enforce the existing airfare ceiling, affordable tickets remain difficult to obtain. Buddha Air, which operates 18 aircraft and around 150 domestic flights daily, reported that seats for travel before Dashain Tika were fully booked through October 21 or 22, 2026. Ministry information officer Shobhakar Regmi said the ministry continued to receive written complaints about high airfares. Gyanendra Bhul, information officer at the Civil Aviation Authority of Nepal, said the official base fare for flights to Dhangadhi could reach Rs 17,235. Meanwhile, Tribhuvan International Airport spokesperson Sanjay Kumar reported that 296 domestic flights carried 15,711 passengers on October 12. Airlines, including Yeti Airlines and Shree Airlines, have cited operational constraints, crew working-hour limits and one-way traffic restrictions as reasons for not operating additional chartered flights. The shortage of affordable air travel has added to the difficulties faced by passengers seeking alternatives to flood-damaged roads during the festive season.
More than 130,000 passengers book advance tickets for Dashain
More than 130,000 passengers have booked advance bus tickets to travel home for Bada Dashain, while nearly 78,000 people left the Kathmandu Valley by road in a 24-hour period as the annual festive exodus gathered pace. According to the Kathmandu Valley Traffic Police Office, 78,138 passengers departed through various checkpoints between Tuesday morning and Wednesday morning. Since Ghatasthapana, the first day of Dashain, a total of 187,774 passengers have left the valley using public transport. Of these, 52,827 departed on October 11 and 56,809 on October 12. Travel disruptions caused by damaged roads have complicated transport management during the festive period. A section of the Prithvi Highway at Galaudi in Dhading collapsed on October 9, adding to difficulties for passengers and transport operators. The Federation of Nepalese Transport Entrepreneurs has urged travellers to purchase tickets in advance, pay only the prescribed fares and check the condition of their vehicles before departure.
Over 30 percent of annual development spending made in final month of fiscal year
More than 30 percent of Nepal’s annual capital expenditure in fiscal year 2025/26 was recorded during the final month, highlighting persistent delays in the implementation of development projects. According to the Ministry of Finance’s annual economic bulletin, 30.86 percent of total annual capital expenditure was made between June 15 and July 16, the final month of the fiscal year. The report points to a pattern of slow spending during the early months, followed by a concentration of expenditure towards the end of the fiscal year. Only around 10 percent of development funds were spent in the first quarter, while more than half of total development expenditure occurred in the final quarter. Historical figures show that end-of-year capital expenditure accounted for 37.47 percent in fiscal year 2020/21, 36.19 percent in 2021/22, 34.49 percent in 2022/23 and 30.2 percent in 2023/24. The report also found that spending during the mid-June to mid-July period accounted for 13.76 percent of total annual budget expenditure, underscoring the government’s continued reliance on last-minute spending. The concentration of expenditure at the end of the fiscal year raises concerns about timely project implementation, budget efficiency and the quality of public investment.
Bagmati’s financial deposits exceed Rs 5 trillion
Financial institutions in Bagmati Province collected deposits worth Rs 5.267 trillion and extended loans totalling Rs 3.624 trillion by the end of fiscal year 2025/26, reflecting continued growth in regional economic activity. According to Nepal Rastra Bank’s annual report on economic activities, deposits and credit expanded by 9.79 percent and 9.07 percent, respectively, compared with the previous fiscal year. The province’s credit-to-deposit ratio stood at 68.82 percent. The service sector accounted for the largest share of lending, receiving Rs 2.169 trillion, or 59.86 percent of total credit. Lending to the sector increased by 9.01 percent year on year. Meanwhile, credit to the industrial sector rose by 10.18 percent to Rs 1.334 trillion, driven primarily by lending to electricity, water and manufacturing industries.
Lumbini allocates Rs 17.45 billion for roads and infrastructure
The Lumbini Province government has allocated Rs 17.45 billion for infrastructure development in the current fiscal year, with a focus on strategic roads, bridge construction and disaster resilience. The budget, implemented through the Ministry of Physical Infrastructure Development, prioritises road links connecting local administrative centres, agricultural production areas and religious tourism destinations with national highway networks. The programme is aligned with the Provincial Road Master Plan and aims to improve connectivity and access to essential services across the province. The provincial government has also earmarked Rs 210 million for the long-delayed Rampur–Kapurkot strategic road project, which has been designated a provincial pride project. The investment is expected to support regional connectivity and improve access for communities, businesses and visitors.
Technical audit finds nine stalled contracts in Sudurpaschim’s eight priority road projects
A technical assessment by the Sudurpaschim Province Ministry of Physical Infrastructure Development has found that nine of the 21 active contract packages under eight provincial pride road projects remain severely delayed. The assessment attributed the delays to contractor defaults and administrative bottlenecks, raising concerns about the implementation of major infrastructure projects. One of the affected projects is the 12-kilometre Gaibandhe–Lipna section of the Daiji–Jogbudha–Salon–Chirkatte–Pokhara–Dhungad highway. The contract was awarded to Dhangadhi-based Sharma Rajendra JV in mid-2020. Although the estimated cost was Rs 468.7 million, the contract was awarded for Rs 213.6 million. The project has completed blacktopping on only two kilometres of the road. The report also highlighted discrepancies between financial expenditure and physical progress, with 79 percent of the allocated funds reportedly spent against 80 percent physical progress. The findings underscore persistent challenges in contractor performance, project management and the timely use of public development funds.
Pokhara tourism entrepreneurs optimistic about flydubai’s direct flights
Tourism entrepreneurs in Pokhara are optimistic about the sustainability of flydubai’s direct flight services between Dubai and Pokhara following the airline’s decision to extend ticket bookings through October 30, 2027. The airline launched the service on September 23, connecting Pokhara International Airport with Dubai. It operates Boeing 737 MAX 8 aircraft with a seating capacity of 165 passengers. According to the reported schedule, flights arrive in Pokhara at 6:15 pm and depart for Dubai at 7:15 pm daily. Data through October 12, 2026, show that 3,113 passengers had arrived in Pokhara on the service, while 1,423 passengers had travelled from Pokhara to Dubai. The government has introduced incentives to support international operations at the airport, including full exemptions on parking, landing and navigation fees, as well as a 50 percent discount on ground-handling charges through mid-September 2028. Tourism entrepreneurs hope the direct connection will improve international access to Pokhara, encourage tourist arrivals and support local businesses.
Bailey bridge over Phalaku Khola restores tourism access to Rasuwa
Tourism activities in Rasuwa have begun recovering following the installation of a 74-metre Bailey bridge over the Phalaku Khola at Betrawati. The Nepal Army constructed the bridge to restore a key transport and tourism route 47 days after severe flooding on August 26 destroyed the original bridge. The restoration of vehicular access has enabled tourists and holiday travellers to resume journeys towards Langtang National Park and Gosainkunda. The prolonged disruption had affected tourism businesses, with hotels, guesthouses and trekking operators experiencing a decline in visitors and occupancy. The reopening of the route is expected to revive local economic activity by improving transport access for tourists and supporting businesses dependent on tourism.
Electricity and communications restored in flood-hit parts of Myagdi and Mustang
Electricity and telecommunications services have been restored in Mustang and Annapurna Rural Municipality of Myagdi following emergency repairs to infrastructure damaged by monsoon floods. Flooding along the Kaligandaki River corridor between September 24 and 27 damaged major transmission infrastructure, disrupting electricity supplies and communications in affected settlements. Four towers along the 220-kilovolt Dana–Khurkot transmission line collapsed at Pokharebagar, Dhirchyang and Bhirkate in Doba. The floods also damaged 10 poles and around 500 metres of transmission wire along the 33-kilovolt Milanchowk–Dana line. Hemraj Chapagain, chief of the Tatopani Distribution Centre, said technical teams restored electricity by rerouting supplies through alternative feeder lines from Kowang in Mustang. The restoration has enabled local communities to regain access to electricity and telecommunications services. However, several hydropower projects remain temporarily out of operation, including the 42-megawatt Mistri Khola, 110-megawatt Nilgiri, 6-megawatt Relihola and 14-megawatt Ghar Khola projects. The disruption to generation facilities and transmission infrastructure highlights the vulnerability of the region’s energy system to extreme weather events.
Festive shoppers crowd Kathmandu markets amid complaints of rising prices
Major commercial centres across the Kathmandu Valley have seen an influx of shoppers purchasing clothes, food and other essentials ahead of Bijaya Dashami. Markets including Bhotahity, Thamel, Asan, Indrachowk, New Road and Bauddhanagar have been crowded as consumers prepare for the festive season. However, shoppers have raised concerns about rising prices of food grains, fresh vegetables, meat and clothing. Trade disruptions following the closure of the Rasuwagadhi and Tatopani border crossings with China on August 26 have reportedly affected the supply of festive goods, leaving merchandise worth around Rs 5 billion stranded. Meanwhile, the Department of Commerce, Supplies and Consumer Protection has intensified market monitoring to curb excessive pricing and other unfair trade practices. According to the department’s director general, inspection teams are checking between 25 and 50 commercial establishments daily to monitor prices and ensure compliance with consumer protection regulations.
Jhapa administration steps up monitoring to prevent festive fuel shortages
The Jhapa District Administration Office has intensified its focus on monitoring the supply and distribution of cooking gas and petroleum products to prevent artificial shortages during the festive season. Chief District Officer Shravan Kumar Pokharel has directed concerned agencies to improve coordination and ensure the smooth distribution of fuel as consumer demand rises during festivals. Umesh Kumar Pokharel, chief of the Nepal Oil Corporation’s Charali office, said there was no shortage of petroleum products in the district. Jit Bahadur Karki, proprietor of Parajuli Gas Industry, said daily demand for LPG in Jhapa stood at around 5,500 cylinders, while approximately 7,600 cylinders were being supplied. Karki added that gas consumption had increased by around 40 percent over the past two months compared with normal levels. Representatives of security agencies, the Nepal Oil Corporation, petroleum dealers and gas sellers participated in a coordination meeting at the District Administration Office on Tuesday to discuss maintaining a regular supply throughout the festive period.
Nepal Embassy in Cairo hosts business forum to strengthen trade with Egypt
The Embassy of Nepal in Cairo has organised a business seminar aimed at expanding trade, investment and tourism cooperation between Nepal and Egypt. The interactive event, titled “Nepal–Egypt Cooperation: Trade, Investment, and Tourism,” brought together representatives of the Egyptian Chamber of Commerce, industrialists and business executives to explore opportunities for closer commercial ties. During the programme, Minister-Counsellor and Deputy Chief of Mission Indira delivered a presentation highlighting investment opportunities in Nepal’s hospitality, manufacturing and commercial sectors. The forum sought to encourage Egyptian businesses to explore Nepal as an investment destination and identify areas for collaboration between enterprises in the two countries. The initiative forms part of broader efforts to strengthen bilateral economic relations by promoting trade, investment and tourism links.
EPS Korea language tests to begin on November 17, with two new sectors added
A total of 76,173 applicants are scheduled to sit for the Korean language examination under the Employment Permit System (EPS) Korea programme, with tests set to begin on November 17 and continue through February 25, 2027. This year, the examination has been expanded to include the service and forestry sectors, in addition to manufacturing and agriculture and livestock. According to the EPS Korea Branch, examinations for the service sector will begin on November 17, followed by forestry on November 18 and agriculture and livestock on November 20. Tests for the manufacturing sector will start on December 11. Of the total applicants, 53,103 have registered for manufacturing, 20,907 for agriculture and livestock, 1,124 for forestry and 1,039 for the service sector. The addition of the two sectors expands the range of employment opportunities available to Nepali applicants seeking work in South Korea through the EPS programme.
Food department orders recall of Swasthya Shree mustard oil over quality concerns
The Department of Food Technology and Quality Control has ordered the recall of Swasthya Shree brand mustard oil after laboratory tests found that the product failed to meet prescribed quality standards. The recall order, issued under Section 38(2) of the Food Hygiene and Quality Act, 2024, covers one-litre packets manufactured by Reliable Nepal Agro Limited in Khairahani-2, Chitwan. The department has instructed the company to withdraw all distributed products from batch number RP 05, manufactured on September 1. The action follows market inspections and laboratory testing conducted to assess compliance with national food quality requirements. The department has warned that failure to recall the affected products could lead to legal proceedings against the manufacturer. Consumers who have purchased the identified batch should check the product details and follow any further instructions issued by the authorities.
Swabhiman Microfinance decides to retain earnings instead of distributing dividends
Swabhiman Laghubitta Bittiya Sanstha has decided to retain its distributable profits from the previous fiscal year rather than distribute dividends to shareholders. The institution’s board of directors made the decision at a meeting held on October 14. Under the decision, the earnings recorded through the end of fiscal year 2025/26 will be carried forward instead of being distributed to shareholders. The move is intended to strengthen the institution’s capital reserves and improve its financial resilience amid challenges facing the financial sector.
Bindhyabasini Hydropower proposes 5 percent bonus shares
Bindhyabasini Hydropower Development Company has proposed distributing a 5 percent bonus share dividend and a 0.2632 percent cash dividend to shareholders to cover applicable taxes. The proposal was approved by the company’s board of directors at a meeting held on October 12, based on profits from the previous fiscal year. The company has also proposed issuing rights shares equivalent to 100 percent of its existing share capital and converting corporate debentures into ordinary shares. These proposals will be presented at the company’s 10th annual general meeting, scheduled for November 4. The company has announced a book closure for October 27, meaning shareholders eligible for the proposed benefits will be determined according to the applicable book-closure rules. The dividend and capital-related proposals remain subject to the required corporate approvals.
First Microfinance proposes 11.05 percent cash dividend
First Microfinance Laghubitta Bittiya Sanstha has proposed distributing a cash dividend of 11.0526 percent from its net distributable profits for fiscal year 2025/26. The proposal, which includes the applicable tax provision, was approved at the institution’s 259th board meeting held on October 13, 2026. The proposed dividend will be distributed only after receiving approval from Nepal Rastra Bank and endorsement by shareholders at the institution’s upcoming annual general meeting. The final distribution will therefore depend on the completion of the required regulatory and corporate approval processes.
Ujyalo Nepal Party resumes campaign to remove VAT on electricity bills
The Ujyalo Nepal Party has resumed its signature campaign demanding the removal of the 5 percent value-added tax (VAT) imposed on electricity bills. The party initially launched the campaign on August 17 but suspended it following the devastating floods in Rasuwa on August 26. Party secretary Kedar Khadka said the campaign had received an enthusiastic public response before being halted and would now continue across the country. The party has called on its leaders and members at the provincial, district, municipal and ward levels to restart the campaign in their respective areas. Through the initiative, the party aims to gather public support for its demand to eliminate VAT on electricity bills.
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