KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy presents a mixed picture, marked by short-term market weakness but ongoing structural adjustments and sectoral resilience. The NEPSE’s broad-based decline and falling gold prices signal cautious investor sentiment, even as the central bank moves to absorb excess liquidity to stabilize the financial system.
At the same time, chronic underutilization of foreign aid highlights persistent implementation bottlenecks in infrastructure development, despite new reform measures aimed at improving project readiness. Encouragingly, policy steps such as opening an automatic route for foreign investment and Litmus Industries’ entry into India’s power grid point to efforts to boost industrial competitiveness and cross-border integration.
Strong provincial investment in Lumbini, rising agricultural output in Dang and Gorkha, and solid corporate earnings from Ncell suggest underlying economic dynamism, though hydropower firms’ losses due to transmission constraints underscore structural weaknesses in energy management. Overall, the data reflect an economy balancing reform ambitions and localized growth against financial market volatility and institutional inefficiencies.
NEPSE drops 20.75 points as most sectors close lower
The Nepal Stock Exchange (NEPSE) index declined by 20.75 points, or 0.77 percent, on Tuesday, settling at 2,642.15 as the market remained under pressure throughout the trading session. Total turnover stood at Rs 8.36 billion, with 20.55 million shares exchanged. Among traded stocks, 214 fell, 42 gained, and six remained unchanged. Most sectoral indices ended in negative territory. The Finance group led the losses, falling 2.11 percent to 2,418.23. Hydropower dropped 1.63 percent to 3,498.17, while Hotels and Tourism slipped 1.19 percent to 7,159.34. Development Bank declined 1.18 percent, Life Insurance 0.78 percent, and Non-Life Insurance 0.75 percent. Manufacturing and Processing edged down 0.73 percent. Banking lost 0.45 percent, Microfinance 0.50 percent, Investment 0.48 percent, and Others 0.58 percent. Only Trading (up 0.22 percent) and Mutual Fund (up 0.48 percent) posted gains.
Gold prices decline, silver edges higher
Gold prices fell in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, fine gold dropped by Rs 900 per tola to Rs 301,900, down from Rs 302,800 on Monday. Silver prices, however, increased slightly. After remaining at Rs 4,860 per tola on Monday, silver rose to Rs 4,885 per tola on Tuesday.
Nepal spends just 11 percent of foreign aid in six months
Delays in infrastructure projects have resulted in low utilization of foreign assistance. Of the Rs 261.7 billion allocated by 10 development partners for fiscal year 2025/26, only Rs 28.47 billion had been spent by the mid-term review. The Asian Development Bank recorded 7.61 percent utilization of its Rs 117 billion allocation, while the World Bank’s spending stood at 14.08 percent. No expenditure has been reported from the Asian Infrastructure Investment Bank. The Ministry of Finance cited inadequate project preparedness, weak coordination among agencies, and frequent staff transfers as key reasons for the poor performance. In response, the government has introduced a “Project Readiness Filter” and begun digitizing forest clearance procedures to accelerate implementation.
NRB withdraws Rs 40 billion from banking system
Nepal Rastra Bank (NRB) absorbed Rs 40 billion in excess liquidity from banks and financial institutions on Tuesday through a deposit collection instrument. The central bank sought bids for an 89-day term, with principal and interest payable on May 17, 2026. Banks and financial institutions submitted online bids by 3:00 pm, with interest rates determined via competitive bidding. The move is aimed at stabilizing the financial system amid surplus liquidity in banks. NRB allocated funds by prioritizing the lowest interest rate bids to ensure cost-efficient monetary management.
Nepal introduces automatic route for foreign investment
The Ministry of Industry, Commerce, and Supplies has unveiled a list of sectors eligible for foreign investment approval through an “Automatic Route.” The reform includes energy projects such as solar, wind, and biomass, along with agricultural processing, infrastructure projects like film cities and cargo complexes, and the IT sector. The government has removed the previous Rs 500 million cap for automatic approval, allowing investments of any size in designated sectors. The measure aims to ease entry for multinational companies, particularly in manufacturing, tourism, healthcare, and software development, to strengthen the national economy.
Nepal provides USD 350,000 for Myanmar heritage restoration
The Government of Nepal has extended USD 350,000 to Myanmar to help rebuild two religious sites damaged by last March’s earthquake. Ambassador Harishchandra Ghimire handed over a USD 300,000 cheque to General Secretary Than Oo at the Mahamuni Pagoda in Mandalay. An additional USD 50,000 was presented to President Pawan Bajoria for the reconstruction of the Gangaghat Hindu Temple, an important religious site for the Nepali community in Myanmar. The support highlights Nepal’s commitment to safeguarding shared cultural heritage and assisting disaster-affected nations.
Hydropower companies report losses over NEA restrictions
Several listed hydropower firms have reported lower second-quarter profits, attributing the decline to directives from the Nepal Electricity Authority (NEA). Companies including Dordi Khola and Himalayan Power Partner say they were instructed to reduce output below installed capacity due to transmission bottlenecks. Rapti Hydro and Nyadi Hydropower also cited frequent disruptions in 32 kV transmission lines. While companies report revenue losses and reduced dividends, NEA spokesperson Rajan Dhakal stated that electricity purchases are being made as per agreements, with minor disruptions attributed to technical issues rather than contractual failures.
Ncell reports Rs 8.18 billion quarterly revenue
Ncell Axiata Limited posted Rs 8.18 billion in revenue for the first quarter of the current fiscal year ending October 16, 2025. The company’s EBITDA margin stood at 49 percent. Amid ownership transition issues involving Spectrlite UK Limited, Ncell expanded its credit rating ceiling to Rs 32 billion to secure both long-term and short-term loans. ICRA Nepal assigned an ‘LA’ rating for Rs 20 billion in long-term debt. Reynolds Holding currently owns 80 percent of the company, while Sunivera Ventures holds the remaining 20 percent.
Lumbini attracts Rs 13.57 billion investment in six months
Lumbini Province recorded Rs 13.57 billion in industrial and commercial investment during the first half of fiscal year 2025/26. The Ministry of Industry, Tourism, and Transport reported Rs 7.60 billion invested in 1,771 small industries and Rs 5.96 billion in 1,920 commercial enterprises. The province generated Rs 52.6 million in revenue. Although 1,456 businesses shut down, 3,691 new firms were registered, reflecting growing entrepreneurial interest. Rupandehi led revenue collection, followed by Dang and Banke.
Dang becomes major supplier of mustard oil
Mustard production in Dang reached 2,198.19 metric tons from 1,278.02 hectares this fiscal year. According to the Agriculture Knowledge Center, Dang’s mustard oil is in strong demand in Kathmandu, Pokhara, and Chitwan. Farmers are currently selling mustard at Rs 14,000 per quintal. With a 50 percent seed subsidy and technical support under the National Agriculture Modernization Project, many farmers are shifting from wheat to mustard due to its shorter cultivation cycle. Output has increased steadily from 1,932 metric tons in 2023, strengthening the local economy.
Dhankuta police raise Rs 180,600 from vehicle auction
The District Police Office in Dhankuta collected Rs 180,600 by auctioning 36 unclaimed and confiscated vehicles. Under Superintendent of Police Sharat Kumar Thapa Chhetri, the auction included 35 motorcycles and one scooter. The vehicles, long held in police custody without claimants, were sold through a transparent public bidding process. Authorities said the auction helped free up limited storage space and prevent further deterioration of the assets. The proceeds have been deposited into the government’s revenue account.
Litmus industries approved to supply Indian power grid
Litmus Industries Limited has become the first Nepali manufacturer authorized by the Power Grid Corporation of India (PGCIL) to supply cables and conductors for cross-border transmission projects. Following a comprehensive quality audit, the company will manufacture and deliver 2,799 kilometers of 400 kV ACSR Moose Conductors. These will be used in the Deding–Dhalkebar and Bathnaha transmission lines linked to the 900 MW Arun-3 Hydropower Project. The approval marks a milestone for Nepal’s industrial sector in meeting international standards.
Gorkha farmers earn Rs 210 million from orange sales
Gorkha district achieved a record orange harvest this year, generating Rs 210 million in sales. Around 3,000 metric tons were produced from 1,097 hectares, up from 2,500 metric tons last year. Favorable weather and improved pest management enabled farmers in areas such as Manakamana and Phinam to secure prices between Rs 80 and Rs 120 per kilogram. Strong returns have encouraged more young farmers to shift from traditional grains to citrus farming.
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