KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic and governance indicators present a mixed picture of improving investment interest and infrastructure progress alongside persistent structural weaknesses in public finance, banking stability, and project execution.
While foreign investment commitments crossing Rs 45 billion and strong customs revenue collection signal continued investor and trade activity, the Auditor General’s findings reveal serious concerns over weak financial discipline, including large tax waivers for aid-funded projects, unauthorized investments by the Nepal Electricity Authority, and Nepal Airlines’ mounting debt burden.
The sharp gap between approved and actual FDI inflows further highlights Nepal’s longstanding challenge in converting commitments into real capital inflows. Rising non-performing loans in the banking sector point to growing financial stress, even as falling gold prices and stable sugar supplies provide some short-term consumer relief.
At the same time, progress in major infrastructure projects such as the Narayanghat–Butwal road expansion contrasts with stalled projects in Karnali and low provincial budget spending, exposing uneven implementation capacity across regions.
Increased mountaineering activity and digital banking expansion reflect opportunities in tourism and financial modernization, but unresolved energy export approvals, contract cancellations, and governance lapses continue to underline the country’s dependence on stronger institutional coordination and policy execution.
Foreign investment pledges cross Rs 45 billion in 10 months
Nepal received foreign direct investment commitments exceeding Rs 45.32 billion during the first 10 months of fiscal year 2025/26, according to the Department of Industry. Between mid-July 2025 and mid-May 2026, investment commitments were secured for 728 projects.
Gold price drops in domestic market
Gold prices declined sharply in the domestic market on Sunday. According to the Federation of Nepal Gold and Silver Dealers Association, the price of gold was fixed at Rs 294,000 per tola, down Rs 4,500 from the previous trading day. Gold had traded at Rs 298,500 per tola on the previous day and Rs 302,500 per tola on Thursday.
Auditor General flags Rs 6.12 billion in tax waivers for foreign-aided projects
The Office of the Auditor General has reported that foreign aid-funded projects received tax and customs exemptions worth Rs 6.12 billion in fiscal year 2024/25 under agreements signed with development partners. According to the Auditor General’s 63rd annual report, the “master list” mechanism used after procurement contracts are finalized has largely benefited construction companies rather than the projects themselves. The report also noted that taxes and customs duties are excluded while preparing project cost estimates.
NEA invested Rs 56.8 billion without government approval
The Nepal Electricity Authority (NEA) invested Rs 56.8 billion in shares of 35 different entities, including subsidiaries and associate companies, without obtaining prior approval from the government, according to the Auditor General’s 63rd report. The report states that Section 5(a) of the Nepal Electricity Authority Act, 1984, requires government approval before such investments are made.
Nepal Airlines debt climbs above Rs 55 billion
Nepal Airlines Corporation’s debt burden has exceeded Rs 55 billion after failing to repay loan principal and interest on time, the Auditor General’s report states. The corporation had borrowed Rs 36 billion from the Employees Provident Fund and the Citizen Investment Trust to purchase Airbus A320 and A330 aircraft in 2013 and 2017 under government guarantees.
Only 14 percent of approved FDI entered Nepal
The Auditor General has revealed that Nepal received only a fraction of approved foreign investment commitments in fiscal year 2024/25. While investment proposals worth Rs 79.69 billion from 1,009 investors were approved, only Rs 11.30 billion was actually brought into the country by 97 investors, accounting for just 14 percent of the pledged amount. The report highlights a widening gap between approved commitments and actual inflows.
Government orders action against sugar black marketing
The Ministry of Industry, Commerce and Supplies has instructed authorities to take action against black marketing and artificial shortages of sugar following India’s export restrictions. After consultations with stakeholders, the ministry stated that Nepal currently has enough sugar stock to meet domestic demand for the next eight months and that no immediate shortage is expected.
Non-performing loans in banking sector rise to 5.60 percent
Nepal Rastra Bank data for the third quarter of fiscal year 2025/26 shows that non-performing loans (NPLs) in Nepal’s banking sector have climbed to 5.60 percent. Among the country’s 20 commercial banks, NIC Asia Bank recorded the highest NPL ratio at 8.85 percent and allocated Rs 22.32 billion for loan loss provisions. Nepal Investment Mega Bank, meanwhile, maintained the highest total loan loss provisioning at Rs 28.45 billion, with an NPL ratio of 8.41 percent.
Around 1,200 climbers join spring expeditions in Nepal
Nearly 1,200 climbers from 79 countries are participating in mountaineering expeditions across Nepal this spring season, according to the Department of Tourism. Between March and May 15, 2026, a total of 1,181 climbers obtained expedition permits. The largest number of climbers came from the United States, including 125 men and 25 women.
Additional 20 MW electricity export to Bangladesh still uncertain
Nepal’s plan to export an additional 20 MW of electricity to Bangladesh remains uncertain due to pending approval from India. Although Nepal is scheduled to export 40 MW of electricity to Bangladesh from June 15, approvals from India’s Central Electricity Authority (CEA), decisions from the Nepal–India Joint Steering Committee, and a revised trilateral agreement are still awaited.
Birgunj Customs collects Rs 199.40 billion in 10 months
The Birgunj Customs Office collected Rs 199.40 billion in revenue during the first 10 months of the current fiscal year, achieving 89.35 percent of its target of Rs 223.18 billion set by the Department of Customs. Customs officials said revenue collection has remained satisfactory, with petroleum products, vehicles, and spare parts contributing the most to earnings.
Narayanghat–Butwal road expansion reaches final stage
The long-delayed expansion of the Narayanghat–Butwal section of the East–West Highway has entered its final phase, with physical progress reaching 91 percent, according to the Department of Roads. Most major construction works have been completed, while finishing work, traffic safety measures, service lanes, and some supporting infrastructure remain pending.
Mustang Customs seizes 592 cartons of e-cigarettes
The Mustang Customs Office at Korala in Lo Manthang–1, Chhoser Nhechung, seized 592 cartons of electronic cigarettes (vapes) during an inspection operation at the Nepal–China border. Officials said the items were found inside two freight containers carrying suspicious goods. The containers, numbered Na 6 Kha 4743 and Na 5 Kha 7921, had entered from the Chinese side two days earlier and were intercepted at the border checkpoint on Saturday evening.
Karnali government seeks details of stalled projects
The Karnali provincial government has asked district offices to submit updated details on incomplete and stalled infrastructure projects with unsatisfactory progress. The Ministry of Physical Infrastructure and Urban Development issued the directive after earlier reports showed that 35 projects had made no progress at all.
Karnali Province spends less than 30 percent of budget
With only two months remaining in the current fiscal year, the Karnali Province Government has spent just 29.03 percent of its total budget. According to the Provincial Accounts Controller Office, only Rs 9.63 billion of the total Rs 32.99 billion budget allocated for FY 2026/27 had been spent by mid-May.
Bagmati Province arrears decline from previous fiscal year
Bagmati Province recorded a decline in arrears in fiscal year 2024/25 compared to the previous fiscal year, according to the Office of the Auditor General. Provincial arrears fell from Rs 851.78 million in FY 2023/24 to Rs 693.79 million in FY 2024/25. However, the report noted that weak budget implementation, spending outside legal provisions, and irregular practices within ministries and agencies continue to contribute to growing overall arrears.
Siddhartha Bank opens sale of 300,000 founder shares
Siddhartha Bank has announced the sale of 300,000 founder shares owned by shareholder Jagdish Kumar Agrawal. Interested buyers have been asked to submit applications within seven days along with the required documents and details of the number of shares they wish to purchase.
Road Department cancels Mahakali bridge contract
The Department of Roads has cancelled the contract for the construction of a four-lane bridge over the Mahakali River after the contractor failed to continue work as agreed. The Road Improvement and Development Project Directorate terminated its agreement with Kumar–CFEC JV, citing prolonged absence from the construction site and non-compliance with contract conditions.
Nabil Bank expands investment services through NBank app
Nabil Bank Limited has expanded investment-related services through its digital banking platform, ‘NBank’. The bank said the new features aim to make investment services more accessible, secure, and convenient for customers. The expansion follows an agreement signed on May 14 between Nabil Bank and Nabil Investment Banking Limited.
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