KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape reflects a mix of short-term market optimism and deeper structural challenges. Strong gains in the NEPSE and rising gold prices indicate heightened investor activity and a possible shift toward safe-haven assets amid uncertainty, while the central bank’s liquidity absorption signals efforts to stabilize excess cash in the system.
However, weak capital expenditure highlights persistent governance and implementation bottlenecks, even as the government pushes long-term reforms through initiatives like the economic census and health sector expansion. External factors—from labor migration flows and geopolitical tensions to falling domestic air travel demand due to high costs—underscore economic vulnerability.
At the same time, improved tourism activity, local infrastructure efforts, and provincial planning show pockets of resilience, suggesting that while policy intent and private sector activity are strengthening, execution gaps and external shocks continue to weigh on overall economic momentum.
NEPSE rises 1.17 percent with turnover exceeding rs 10.5 billion
The Nepal Stock Exchange (NEPSE) climbed by 33.27 points, or 1.17 percent, on Wednesday to close at 2,866.87. The Sensitive Index also gained 1.09 percent to settle at 481.87, while float-based indices posted similar increases. A total of 26.43 million shares of 344 companies were traded through 123,359 transactions, generating a turnover of Rs 10.537 billion—up from Rs 8.665 billion recorded on Monday. Trading had remained closed on Tuesday due to a public holiday. All 13 sector indices advanced, with hotels and tourism, along with hydropower, leading the gains. Five companies reached the positive circuit limit.
Gold and silver prices rise in domestic market
Prices of gold and silver increased in the domestic market today. Gold rose by Rs 6,000 per tola, while silver increased by Rs 320. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold is now priced at Rs 302,700 per tola, and silver at Rs 5,220 per tola. Earlier this week, gold was trading at Rs 296,700 and silver at Rs 4,900. On Sunday, gold stood at Rs 297,100, while silver was priced at Rs 4,975 per tola.
NRB absorbs rs 40 billion liquidity from market
Nepal Rastra Bank (NRB) withdrew Rs 40 billion from the financial system on Wednesday to manage surplus liquidity in the banking sector. The central bank used a 56-day deposit collection tool for this purpose. Class ‘A’, ‘B’, and ‘C’ financial institutions took part in the online bidding process, which closed at 3:00 PM. The interest rate was set through competitive bidding, with a minimum participation threshold of Rs 100 million. The deposited amount, along with interest, will be repaid on June 10.
Capital spending reaches only 23.58 percent in nine months
Government spending on capital projects has reached just Rs 96.19 billion—23.58 percent of the annual target of Rs 407 billion—in the first nine months of fiscal year 2025/26 (July 17, 2025, to April 13, 2026). This marks a decline compared to 29.2 percent during the same period last year. Infrastructure development was affected by political instability, including protests in September 2025 and elections in March 2026. Meanwhile, revenue collection has reached Rs 886 billion, or 60 percent of the target, while recurrent expenditure stands at Rs 747 billion.
Govt launches second National Economic Census nationwide
The National Statistics Office began the second National Economic Census to gather comprehensive data for development planning. A total of 4,433 trained personnel have been mobilized through 84 district offices. The census will run until June 21 and will cover 18 out of 21 key economic sectors, including industry, trade, and private enterprises. Diplomatic missions and security agencies are excluded. The process incorporates an online e-census system and Geographic Information System (GIS) tools, with all data protected under the Statistics Act 2022.
Govt pledges to raise health budget share to 8 percent by 2031
The government has committed to increasing the health sector’s share of the national budget to 8 percent by mid-April 2031. Although the World Health Organization recommends a 10 percent allocation, the government aims for gradual progress. Planned initiatives include introducing a “One Citizen, One Digital Health Profile” system and expanding health insurance coverage nationwide. Additional commitments include free treatment for burn victims and mental health services, along with ensuring at least one MDGP doctor at every primary health center. Preventive healthcare and wellness zones in major tourist areas are also part of the strategy.
Over 1,000 Nepali migrants rescued from conflict-hit West Asia
The Ministry of Foreign Affairs has repatriated 1,058 Nepali nationals from West Asia following escalating tensions involving the US, Israel, and Iran. Since April 2, evacuation efforts coordinated by Foreign Minister Shishir Khanal have used Nepal Airlines and other carriers. Of those rescued, 709 returned via Nepal Airlines, while 251 arrived on Kuwait Airways. The ministry is currently tracking Nepalis abroad through its Emergency Operations Center and an online system managed by the Department of Consular Services.
Labor permits resumed for four middle eastern countries
The Department of Foreign Employment has resumed issuing re-entry labor permits for Israel, Kuwait, Bahrain, and Lebanon. The decision follows a ministerial meeting held on April 13. Earlier, permits for the Middle East and Gulf countries had been suspended on March 1 due to rising tensions between the United States and Iran. With this update, key labor destinations, including Saudi Arabia, the UAE, and Qatar, are now fully reopened for returning workers.
Telecom Authority blocks over 10,000 illegal betting platforms
The Nepal Telecommunications Authority (NTA) has shut down more than 10,000 online betting websites and applications as part of a crackdown on illegal gambling. According to Deputy Director Surya Prasad Lamichhane, Nepal Telecom alone blocked over 21,000 URLs and apps. The move follows a Cabinet decision on March 27 requiring such platforms to be closed within 24 hours. Under the National Penal Code 2017, involvement in betting activities can lead to up to one year of imprisonment and a fine of Rs 10,000.
APF tightens monitoring at border points to curb revenue leakage
The Armed Police Force (APF) has increased surveillance at key border crossings, including Kakarbhitta, Bhadrapur, and Gauriganj in Jhapa, to control revenue leakage. Authorities are strictly enforcing customs duties on goods exceeding Rs 100 brought from India. The move follows concerns from local traders about declining business due to cross-border shopping. Acting on directives from the Ministry of Home Affairs, APF units are also conducting awareness campaigns and intensifying checks to prevent illegal imports and tax evasion.
Air traffic on Simara-Kathmandu route drops by 65 percent
Passenger flow on the Simara-Kathmandu air route has declined sharply by 65 percent following a rise in ticket prices driven by higher fuel costs. Daily passenger numbers have fallen from around 600 to just 200. One-way fares now range between Rs 5,150 and Rs 5,550. Buddha Air, currently the sole operator on this route, reports that its ATR-72 aircraft are operating at only about 50 percent capacity. Many travelers from Bara, Parsa, and Makwanpur are choosing a four-hour road journey instead of a 15-minute flight due to the increased airfare.
Pokhara Metropolitan inaugurates disaster risk reduction center
Pokhara Metropolitan City has launched a Disaster Risk Reduction Center (DRRC) at the fire brigade premises in Shanti Ban. The facility, built at a cost of Rs 52.1 million, also accommodates the Metropolitan Police. It is designed to centralize fire, ambulance, and rescue services to better respond to disasters such as floods, landslides, and forest fires. Advanced monitoring systems will track high-risk zones, including the Seti River and nearby cave areas. Disaster management committees have also been established across all 33 wards to train local residents as first responders.
Irrigation projects in Parbat risk cancellation over delays
Several irrigation projects in Parbat District face possible cancellation as consumer committees have yet to finalize agreements with only three months remaining in the fiscal year. Out of 78 planned projects, 10 are still pending. Farmers have been reluctant due to procedural requirements, including a deposit of Rs 100 per ropani and formal committee registration. The projects, ranging in value from Rs 500,000 to Rs 3.5 million, are also affected by labor shortages and inflation. If agreements are not completed in time, allocated provincial funds may be withdrawn.
Community bio-embankments protect Bhajani from river erosion
Locally initiated bio-embankment projects have successfully controlled erosion caused by the Kandra River in Bhajani Municipality-4, Kailali. Initially supported through community labor and small household contributions, the project has expanded with Rs 2.5 million in funding from the municipality and partner organizations. Earlier efforts had already invested over Rs 6.5 million in similar measures. So far, 500 meters of embankment have been completed, safeguarding 435 households. The reclaimed land is now being used for agroforestry and riverbed farming, helping boost local livelihoods and reduce displacement risks.
Sudurpaschim prepares second five-year development plan
The Policy and Planning Commission of Sudurpaschim Province has drafted a preliminary framework for its Second Five-Year Plan, which will come into effect on July 17, 2026, marking the start of fiscal year 2026/27. The plan emphasizes boosting productivity, alleviating poverty, and creating a more business-friendly environment. Key initiatives include setting up a “One-Door Service Center” for industrial registration and a “Foreign Investment Facilitation Desk.” Priority sectors include agriculture, tourism, medicinal herbs, energy, and mining. The strategy also focuses on developing provincial brands, promoting e-commerce, and upgrading infrastructure through public-private partnerships to enhance living standards.
Nawalparasi administration office shifts to new building
The District Administration Office in Nawalparasi (Bardaghat Susta Paschim) has started operations from its newly constructed three-story building, built at a cost of Rs 78.7 million. Construction began in 2023 after demolishing the previous structure. During the construction period, services were temporarily provided from the Chamber of Commerce and Industry building. Although the project faced delays beyond its initial January 2025 deadline, the contractor officially handed over the building on April 9.
Hetauda cement industry struggles amid financial constraints
The state-owned Hetauda Cement Industry remains largely non-operational due to financial difficulties and shortages of raw materials. Although there was a recent attempt to resume production, operations lasted only five days this fiscal year, producing 2,500 tons of clinker and 30,000 bags of cement. The company faces outstanding dues to the Nepal Electricity Authority and coal suppliers, limiting its ability to procure the 120 tons of coal needed daily. The plant currently employs 318 staff but is hindered by outdated equipment and political interference.
Sauraha hotels see 70 percent occupancy during New Year
Hotels in Sauraha, a major tourist destination in Chitwan, recorded occupancy rates exceeding 70 percent during the Nepali New Year celebrations. Tourism entrepreneurs reported a significant increase in domestic visitors compared to last year, supported by improved road connectivity from Pokhara and Bhairahawa. While larger hotels targeting international tourists saw modest growth, smaller establishments were fully booked. Around 90 percent of visitors were domestic travelers. Local organizations plan to host several annual cultural events to maintain this growth and attract more internal tourism.
Comment