KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic indicators present a mixed picture, with modest activity in financial markets but underlying structural and supply-side challenges. The stock market recorded only a slight gain, while falling gold and silver prices suggest short-term fluctuations in commodity demand.
Although banks posted Rs 38 billion in profit and deposits in banks and financial institutions continued to rise, profit growth has slowed and performance remains uneven across institutions. At the same time, weak development spending—only about one-fifth of the capital budget utilized in eight months—points to persistent inefficiencies in public expenditure.
Labor shortages in the construction sector, dependence on foreign workers, and sporadic LPG supply issues highlight domestic structural constraints, even as new hydropower capacity adds to energy infrastructure.
Meanwhile, global risks such as rising oil prices due to the West Asia conflict could further strain regional economies and potentially impact Nepal through higher energy costs and supply disruptions.
NEPSE sees modest gain on first trading day of the week
The benchmark index of the Nepal Stock Exchange recorded a slight rise on the first trading day of the week. The NEPSE index gained 4.45 points to close at 2,824.90. Shares of 350 companies were traded during the day. A total of 39,549,033 shares were exchanged through 124,490 transactions, generating a turnover of Rs 14.32 billion. Among sectoral indices, the hotel and tourism sector declined by 0.62 percent, investment by 0.54 percent, life insurance by 0.46 percent, and mutual funds by 0.25 percent. All other sectors posted gains, with the trading sector recording the highest increase of 2.83 percent. The banking sector rose by 0.21 percent, development banks by 0.74 percent, finance by 0.22 percent, manufacturing and processing by 0.12 percent, microfinance by 0.15 percent, non-life insurance by 0.16 percent, and the others group by 0.03 percent.
Gold and silver prices decline on Sunday
Gold and silver prices in the domestic market fell on Sunday compared with Friday. The price of gold dropped by Rs 4,800 per tola (11.66 grams), while silver declined by Rs 225 per tola. According to the Federation of Nepal Gold and Silver Dealers’ Associations, the current price of hallmark gold stands at Rs 309,400 per tola, while silver is priced at Rs 5,270 per tola. Last Friday, gold had traded at Rs 314,200 per tola and silver at Rs 5,495. On Thursday, hallmark gold was valued at Rs 317,000 per tola and silver at Rs 5,515.
Commercial banks post Rs 38 billion profit in first seven months of FY 2025/26
Commercial banks earned a combined profit of Rs 38 billion in the first seven months of fiscal year 2025/26. Data from Nepal Rastra Bank shows that 20 commercial banks recorded a total profit of Rs 38.0166 billion by mid-February 2026. This represents a decline of 5.40 percent compared with the same period last fiscal year, when banks had earned Rs 38.0879 billion by mid-March 2025. The performance among banks was mixed: profits increased for 10 banks while the remaining 10 experienced declines. Profit growth among the improving banks ranged from 6.62 percent to 329 percent, whereas those with declining profits recorded drops ranging from 5.17 percent to 84.73 percent. Among the banks, Nabil Bank reported the highest profit of Rs 5.38 billion, followed by Global IME Bank with Rs 4.14 billion. Kumari Bank earned Rs 3.17 billion and Everest Bank recorded Rs 2.50 billion. Other banks earning over Rs 2 billion include Prime Bank, Nepal Investment Mega Bank and NMB Bank.
BFIs’ deposits rise by 6% to Rs 7,698 billion
Deposits held by banks and financial institutions increased by 6 percent, adding Rs 433.71 billion to reach Rs 7,697.59 billion by mid-February 2026. During the same period last year, deposits had grown by 3.8 percent, equivalent to Rs 245.34 billion. On a year-on-year basis, deposits expanded by 14.9 percent. According to the latest macroeconomic and financial situation report published by Nepal Rastra Bank, the composition of deposits also changed. Demand deposits accounted for 6.5 percent of the total, savings deposits 42.8 percent, and fixed deposits 41.6 percent. A year earlier, the respective shares were 5.2 percent, 34.8 percent, and 52.4 percent. Institutional deposits represented 34.3 percent of total deposits by mid-February 2026, slightly lower than 35.3 percent a year earlier.
Development expenditure at 19 percent in eight months
Development spending has remained weak until the end of Fagun (March 14) in the current fiscal year. Data from the Financial Comptroller General Office shows that only around 19 percent of the capital budget had been utilized by the second quarter. The federal government allocated a total budget of Rs 1,964.11 billion for the fiscal year, but only about Rs 926.59 billion had been spent by mid-March, representing 47.18 percent of the annual allocation. Under current expenditure, 54.37 percent of the Rs 1,189.8 billion allocation has been spent. Capital expenditure utilization stands at 19.24 percent out of the allocated Rs 407.888 billion. Likewise, under the financial management heading, 54.89 percent—or Rs 205.952 billion—has been spent from the allocated Rs 375.242 billion.
Construction entrepreneur says wages for skilled workers could reach Rs 50,000
Rabi Singh, president of the Federation of Contractors’ Associations of Nepal, said wages in the construction sector could reach up to Rs 50,000 per month for skilled workers. He highlighted a severe shortage of laborers in Nepal’s construction industry and noted that the sector offers attractive salaries and job opportunities. According to him, workers specializing in bridge construction alone can earn up to Rs 50,000 monthly. Currently, many bridge workers are Indian nationals who reportedly send billions of rupees back to India as wages. Singh estimates that about 700,000 Indian workers are engaged in Nepal’s construction sector. He attributed this reliance on foreign workers to the government’s failure to develop sufficient skilled manpower domestically.
Power from Upper Thulokhola hydropower project connected to national grid
Electricity generated by the 22.5-megawatt Upper Thulokhola Hydropower Project has been connected to the central grid. The connection was completed after finishing construction work, installing equipment and conducting internal tests at the project developed by Thulokhola Hydropower Limited in Raghuganga Rural Municipality-7. Following five days of successful testing, the project began supplying power to the grid. During the current dry season, it has generated 13.86 megawatts of electricity. Construction of the run-of-river project began in 2080 BS (2023/24). It includes a six-kilometer 132 kV transmission line from Phedi to Bandi. The electricity is transmitted to the national grid through the 220 kV Dana-Khurkot transmission line via Tilkenichauar.
KMC warns against artificial shortage of LPG and fuel
The Kathmandu Metropolitan City has warned that strict action will be taken against individuals or businesses creating artificial shortages of LPG, diesel or petrol. The city administration said it has set up a monitoring mechanism after receiving complaints about fuel hoarding and black-market activities. Officials warned that those spreading misinformation about cooking gas shortages or charging excessive prices would face legal action. Businesses have been urged to sell half-filled LPG cylinders at Rs 955 per cylinder, while consumers have been advised not to pay more than the fixed price.
NOC urges public not to hoard LPG
The Nepal Oil Corporation has appealed to the public to purchase liquefied petroleum gas only as needed and avoid unnecessary stockpiling. The corporation also instructed bottlers and distributors to prioritize supplying LPG for household use. Despite the conflict in West Asia affecting the global supply of petroleum products and LPG, the corporation said it is continuing regular distribution. Gas bottlers have been directed to submit daily reports by 10 a.m., including details of sales quantities, addresses and contact numbers of sellers. Retailers have also been asked to maintain records of consumers and sales quantities and submit the information to the corporation. Additionally, the corporation announced that 7.1-kilogram LPG cylinders will be sold at a reduced price of Rs 955 from March 13 until further notice.
Maintenance begins at Upper Marsyangdi ‘A’ hydropower project
Major maintenance work has started at the 50-megawatt Upper Marsyangdi A Hydropower Project located in Marsyangdi Rural Municipality of Lamjung district. Project officials said the work began on Saturday and is expected to take about one and a half months. The maintenance includes repairs to turbines at the power station and improvements at the dam site. The plant, which has been operating for about nine years, uses two 25-megawatt Francis turbines. A technical team from China is conducting the turbine maintenance. One turbine will undergo a major overhaul, while the other will receive moderate maintenance. During the maintenance period, electricity will be produced from only one unit. Repair work is also underway at the dam area of the run-of-river project.
LPG shortage hits mountain districts
A shortage of cooking gas has been reported in the mountain districts of Kalikot and Jumla, forcing residents to stand in long queues with empty cylinders. In Kalikot, many households have begun arranging firewood as an alternative for cooking due to the shortage. In Jumla Bazaar, irregular supply has resulted in long lines outside gas depots and shops from early morning. Distributors said the shortage is largely due to panic buying caused by rumors of supply disruptions. They urged consumers not to panic, noting that gas supplies are being transported from Surkhet. However, the situation in Jumla Bazaar appears more severe, with women, children and elderly residents waiting in line with empty cylinders at several locations.
Oil supply disruption may affect multiple sectors in Asia
Rising global crude oil prices amid the conflict in West Asia could have ripple effects across several sectors in Asia, including India, according to a report by Morgan Stanley. The report warns that sustained increases in oil prices could push Asia’s oil burden above its 10-year average. Beyond price increases, the report highlights concerns about potential disruptions in supply, particularly for liquefied natural gas. Economies such as India, Thailand, Korea and Taiwan are considered most vulnerable to such disruptions. The report also identifies possible impacts on fertilizers, propane, petrochemicals such as butadiene, helium and sulphur, which could affect industries including agriculture, semiconductor manufacturing, automobiles and consumer goods.
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