KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic indicators reflect a mixed but cautious outlook, marked by weakening market sentiment, slow public spending, and persistent structural challenges. The decline in the NEPSE index and reduced turnover signal investor uncertainty even as banks expand lending to the share market, while modest gains in gold prices indicate continued preference for safer assets.
Fiscal performance shows moderate revenue collection but critically low capital expenditure at both federal and provincial levels, highlighting long-standing inefficiencies in development spending despite rising current expenditures and a widening budget deficit. At the same time, external factors—such as higher global fuel prices and West Asian airspace disruptions—are pushing up domestic fuel costs and international airfares, adding pressure on consumers and the tourism sector.
Continued outmigration for foreign employment, calls to operationalize Gautam Buddha International Airport, and stalled infrastructure and hydropower projects further underscore the economy’s reliance on external opportunities and the urgent need for stronger policy execution and infrastructure utilization to stimulate sustainable growth.
NEPSE drops 26.07 points as turnover declines to Rs 11.97 billion
The Nepal Stock Exchange (NEPSE) index fell by 26.07 points on Monday, closing at 2,798 as trading activity weakened along with market turnover. Daily transactions totaled Rs 11.97 billion, down from Rs 14.35 billion recorded in the previous session. Share prices of 48 companies increased, while 211 declined and four remained unchanged. Among sectoral indices, only the Manufacturing and Processing group registered a gain of 0.25 percent, whereas all other sectors closed lower. The Banking sector dropped by 1.61 percent, Development Bank by 0.84 percent, Finance by 0.71 percent, Hotels and Tourism by 0.26 percent, Investment by 1.52 percent, Life Insurance by 0.94 percent, Microfinance by 0.75 percent, Non-life Insurance by 0.45 percent, Others by 1.09 percent, and the Trading group by 0.21 percent.
Gold price rises slightly while silver declines
Gold prices increased slightly in the domestic market on Monday, while silver prices declined. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold rose by Rs 100 per tola and is now priced at Rs 309,500 per tola. On Sunday, the price stood at Rs 309,400 per tola. Meanwhile, silver prices fell by Rs 5 per tola, dropping from Rs 5,270 on Sunday to Rs 5,265 on Monday. In the international market, gold was trading at $5,013.6 per ounce, while silver was priced at $80.12 per ounce.
Govt collects just over half of annual revenue target in eight months
The government has collected Rs 747 billion in revenue during the first eight months of the current fiscal year, achieving 50.49 percent of the annual target of Rs 1.48 trillion. Including grants, total government income has reached Rs 765.1 billion. Finance Ministry spokesperson Tanka Prasad Pandey said economic activity increased following the March 5 elections, but meeting the revised revenue target of Rs 1.298 trillion still appears challenging. Capital expenditure during the period stands at Rs 78.48 billion, which is only 19.24 percent of the allocated Rs 407 billion.
NOC raises fuel prices as petrol reaches Rs 172 per liter
The Nepal Oil Corporation (NOC) has increased the prices of petrol, diesel, and kerosene effective from Monday, citing higher international fuel costs. Petrol prices have been raised by Rs 15 per liter, while diesel and kerosene have increased by Rs 10 per liter. In Kathmandu, Pokhara, and Dipayal, petrol now sells for Rs 172 per liter, while diesel costs Rs 152 per liter. Despite receiving higher procurement prices for liquefied petroleum gas from the Indian Oil Corporation, the NOC said the retail price of cooking gas will remain unchanged. Fuel prices continue to differ across three regional categories depending on their distance from major supply depots.
Airfares surge after West Asian airspace disruptions
International airfares from Nepal have sharply increased following the cancellation of 16 flights since February 28 due to airspace disruptions in West Asia. According to Gyanendra Bhul, information officer at the Civil Aviation Authority of Nepal, airlines such as Qatar Airways, Jazeera Airways, and Kuwait Airways have been facing ongoing operational difficulties. Ramesh Thapa of the Nepal Association of Tour and Travel Agents (NATTA) said economy-class tickets to the United States have climbed to around Rs 300,000, while fares to Europe have reached nearly Rs 200,000. Although airlines like Fly Dubai and Air Arabia have resumed limited services, the shortage of budget seats and rerouting through Delhi or Southeast Asia continues to affect passengers and the tourism sector.
ERC rejects industrialists’ claims in dedicated and trunk line tariff dispute
The Electricity Regulatory Commission (ERC) has ruled that the arguments presented by industrialists in the dispute over dedicated and trunk line tariffs were not sufficient. During a hearing involving Panchakanya Plastic and Panchakanya Steel, the commission led by Chairman Ram Prasad Dhital upheld the Nepal Electricity Authority’s authority to recover unpaid dues. Panchakanya Plastic owes approximately Rs 2.4 million, while Panchakanya Steel has outstanding dues of around Rs 5.2 million. The ruling allows the NEA to proceed with recovering the arrears. Although the commission’s decision is final within its jurisdiction, the companies still have the option to challenge it in court.
Development spending limited to 19.24 percent in eight months
Figures from the Financial Comptroller General Office show that Nepal’s development expenditure reached only 19.24 percent during the first eight months of fiscal year 2025/26. Out of the Rs 407 billion allocated for capital spending, only Rs 78.48 billion had been utilized by mid-March. Meanwhile, current expenditure reached Rs 642 billion, accounting for 54.37 percent of its target. During the same period, the government collected Rs 747 billion in revenue, resulting in a budget deficit as overall spending exceeded income by roughly Rs 180 billion.
More than 52,000 Nepalis obtain foreign employment permits in a month
According to the Department of Foreign Employment, a total of 52,944 Nepalis secured labor permits between February 13 and March 14, even as the government suspended approvals for workers heading to 11 conflict-affected countries. The figure includes 46,452 men and 6,392 women. Malaysia remained the leading destination with 12,601 workers, followed by the United Arab Emirates with 11,492 permits. Although the government decided on March 1 to halt new labor approvals for countries such as Israel, Saudi Arabia, and Qatar due to tensions in West Asia, individuals who had already received permits earlier were allowed to leave for their jobs.
CIB arrests former finance executive chair Yogendra Prasad Shrestha
The Central Investigation Bureau (CIB) of Nepal Police on Sunday arrested Yogendra Prasad Shrestha, former executive chairman of Nepal Share Markets and Finance Limited. Shrestha, 69, was taken into custody in Sitapaila of Nagarjun Municipality-5 following a complaint filed by Nepal Rastra Bank. On August 21, 2024, the Supreme Court had convicted him in two cases, sentencing him to a combined six years in prison along with fines totaling Rs 226.7 million. The CIB has presented him before the Kathmandu District Court to implement the court’s verdict.
Commercial banks expand share market lending by 42.9 percent
Nepal Rastra Bank reports that 19 commercial banks increased their lending to the share market by 42.9 percent during the first seven months of the fiscal year. Total lending reached Rs 133.076 billion, compared to Rs 93.124 billion during the same period last year. Nabil Bank recorded the highest lending volume at Rs 17.53 billion, while Agricultural Development Bank posted the fastest growth rate at 286.3 percent. Only Citizens Bank and Nepal Bank reduced their exposure to the sector, while Standard Chartered Bank remains the only commercial bank that does not provide such loans.
Bagmati Province spends 17.12% of capital budget in eight months
The Bagmati Province government has utilized only 17.12 percent of its capital budget during the first eight months of fiscal year 2025/26. According to Suraj Paudel, an official at the Ministry of Economic Affairs and Planning, overall spending reached Rs 15.05 billion, representing 22.31 percent of the province’s total budget of Rs 67.477 billion. Among ministries, the Ministry of Culture and Tourism recorded the lowest spending rate at 7.64 percent. Paudel said the weak performance was partly due to infrastructure damage and disruptions in government operations caused by the “Gen Z” protests held on September 8 and 9, 2025.
LP gas imports through Belahiya remain stable despite shortage concerns
The Bhairahawa Customs Office reported that 6,660 tons of liquefied petroleum gas were imported through the Belahiya border between February and mid-March. Information officer Uddhav Dhungana said imports remain consistent with previous months, with 47.4 million kilograms of gas arriving by mid-February. However, Pradeep Panta, president of the Gas Sellers Association in Rupandehi, said a sense of shortage has emerged as consumers rush to refill spare cylinders amid fears of supply disruptions linked to tensions in West Asia. To prevent black marketing, Chief District Officer Madhav Prasad Pokharel and Tilottama Municipality Deputy Mayor Jageshwar Devi Chaudhary have launched market inspections and warned of legal action against those involved in hoarding.
Sudurpashchim Province capital spending remains below 10%
Capital expenditure in Sudurpashchim Province has remained below 10 percent during the first eight months of the current fiscal year. Of the Rs 19.83 billion allocated for development projects, only Rs 1.97 billion, or 9.99 percent, has been spent so far. The Provincial Treasury and Accounts Controller Office stated that Rs 17.85 billion of the budget remains unspent with just four months left in the fiscal year. Although Chief Minister Kamal Bahadur Shah instructed ministries on December 29, 2025, to submit expenditure plans within 15 days, none of the departments have complied with the directive.
Reconstruction of BP Highway speeds up at three damaged sections
The Road Division Office in Bhaktapur has accelerated permanent reconstruction work on three damaged stretches of the BP Highway. Senior Divisional Engineer Suman Yogesh said about 25 percent of the work has already been completed in the Kavrepalanchowk sections, with authorities aiming to finish the key infrastructure before the upcoming monsoon season. After severe floods during the 2024 monsoon caused major damage, the government allocated Rs 8.50 billion for the reconstruction project. The Japan International Cooperation Agency (JICA) is also expected to sign a contract this month for the development of a 3.2-kilometer section. The highway will be upgraded into a two-lane road, including the widening of five bridges.
Lumbini Province records 25.4% capital expenditure in eight months
Lumbini Province has utilized 25.4 percent of its capital budget during the first eight months of the fiscal year. Out of the Rs 23.471 billion allocated for development spending, only a quarter has been used, according to the Provincial Treasury and Accounts Controller Office. Including current expenses, total spending has reached 27.63 percent of the province’s overall Rs 38.91 billion budget. The Ministry of Health recorded the highest spending rate at 48.63 percent, while the Ministry of Internal Affairs and Law reported the lowest at 7.68 percent. Officials attributed the slow spending to delays in project implementation and the tendency to accelerate work toward the end of the fiscal year.
Sunwal Municipality begins Rs 30 million road upgrade project
Sunwal Municipality has started upgrading the road section north of Sunwal Chowk with an investment of Rs 30 million. The project will transform the 564-meter stretch into a modern two-lane roadway equipped with drainage systems and pedestrian sidewalks. Mayor Bimala Aryal described the project as a vital infrastructure improvement for the town and stressed that authorities would maintain strict oversight to ensure quality construction. The municipality’s technical team, along with Chief Administrative Officer Sheshkant Poudel, is coordinating with the Department of Roads to ensure compliance with technical standards. The project is expected to improve traffic safety and enhance the market area’s urban environment.
Bhadrapur Tax Office achieves 80.43% of revenue target
The Inland Revenue Office in Bhadrapur has collected Rs 2.705 billion in revenue during the first eight months of the fiscal year, reaching 80.43 percent of its target of Rs 3.364 billion. Chief Tax Officer Gopal Bahadur Thapa said income tax contributed Rs 1.248 billion, while Value Added Tax generated Rs 973.2 million. He noted that market monitoring activities slowed during the March 5 elections, but the office plans to intensify taxpayer awareness and monitoring efforts to meet the annual revenue goal.
Kakarbhitta Immigration records 6,791 third-country tourists
The Immigration Office in Kakarbhitta reported that 6,791 tourists from third countries entered Nepal through the eastern border crossing during the first eight months of fiscal year 2025/26. Office Chief Tulsi Bhattarai said tourist arrivals from the United States, the United Kingdom, and Bhutan peaked in January with 1,850 visitors. During the same period, 3,133 Nepalis returned home, while 6,552 foreign tourists and 1,847 Nepalis departed through the border point. In the previous fiscal year 2024/25, the crossing recorded a total of 8,723 tourist entries.
Entrepreneurs call for full operation of Gautam Buddha International Airport
Business leaders in Rupandehi have urged the government to ensure full-scale operation of Gautam Buddha International Airport. Despite major infrastructure investments, the airport continues to remain underutilized, raising concerns over more than Rs 100 billion invested in tourism facilities in the region. Tourism entrepreneur Amit Gupta said the airport is essential for promoting destinations such as Lumbini, Devdaha, and Tilaurakot. Siddhartha Chamber of Commerce and Industry President Netra Prasad Acharya expressed hope that the incoming government will prioritize stable international flights to boost the regional economy. Business leader Madhu Prasad Panthi also highlighted the airport’s potential to facilitate exports from the Bhairahawa industrial corridor.
Historic Bajura small hydropower plant remains closed
The Bajura Small Hydropower Project, the district’s first electricity plant built in fiscal year 1989/90 with Japanese assistance, has remained shut for the past five years. The 200-kilowatt facility, constructed by the Fuji Company at a cost of Rs 25 million, ceased operations after the national transmission line reached Martadi. Although Triveni Savings and Credit Cooperative managed the plant until January 18, 2022, the Nepal Electricity Authority later reclaimed ownership but has not restarted operations. Local residents say the abandoned canal has become a health hazard, while civil society groups are urging authorities to hand over the facility to local governments for preservation.
Krishnapur Municipality offers 50% subsidy on banana saplings
Krishnapur Municipality has announced a program to provide banana saplings to farmers at a 50 percent subsidy. Agriculture Branch Chief Lal Bahadur Dhami said the municipality has allocated Rs 500,000 for the initiative, which will distribute saplings worth a total of Rs 1 million. Currently, 35 commercial farmers cultivate bananas across 55 hectares in the municipality. Farmers, cooperatives, and agricultural enterprises can apply within 30 days by submitting land ownership or lease documents. The program aims to expand local production, increase farmers’ income, and create employment opportunities in the agricultural sector.
Madi Municipality completes land classification into seven categories
Madi Municipality has finalized the classification of land into seven categories in accordance with the Land Use Act 2019. Chief Administrative Officer Jagat Prasad Bhusal said forests cover the largest share of land, totaling 12,975.75 hectares out of the municipality’s 21,824.44 hectares. Other categories include 6,535.07 hectares designated for agriculture, 1,918.87 hectares for residential use, and 59.93 hectares for commercial activities. The classification details have been forwarded to ward offices. Landowners who disagree with the categorization of their property may submit appeals for reconsideration under the existing guidelines.
Sudurpashchim hydropower projects await construction decisions
The Sudurpashchim Province government has completed feasibility studies for three hydropower projects over the past six years but has yet to decide how they will be constructed. The proposed projects include the 8.80 MW Naugad, 6.90 MW Surnayagad, and 7.71 MW Upper Surnayagad. Senior Divisional Engineer Mohan Kunwar said each feasibility study cost between Rs 8 million and Rs 9 million. Although the Initial Environmental Examination has been approved, progress remains stalled due to the absence of federal legislation defining provincial authority in power generation. Plans to attract private investors through an investment summit were postponed following unrest in September 2025.
Foundation stone laid for Palanse–Tarkeshwar road project
Bagmati Province Health Minister Kiran Thapa Magar laid the foundation stone for the Palanse–Tarkeshwar road project in Suryabinayak Municipality-8. The Ministry of Physical Infrastructure Development has allocated Rs 300 million for the construction and upgrading of the road. The project will link the Suryabinayak Ring Road with key tourist destinations such as Ranikot, Ghyampedanda, and Ashapuri. Ward Chairman Pushpa Raj Basnet said the road will support the “Shiv Circuit” pilgrimage route and improve market access for agricultural products from surrounding villages. Construction work began immediately after the ceremony.
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