KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The developments reflect a mixed but telling picture of Nepal’s economy, marked by strong liquidity and market optimism alongside persistent structural weaknesses. The stock market’s broad-based gains and rising gold prices point to excess liquidity and investors’ preference for financial and safe-haven assets, a trend reinforced by Nepal Rastra Bank’s continued liquidity absorption amid weak credit demand.
At the same time, low capital spending by the Karnali Province, declining paddy production, and CNI’s call for economy-focused election manifestos highlight deeper concerns around public investment inefficiency, slowing productive sectors, and policy uncertainty.
While initiatives such as the Investment Board’s one-stop service center, a new tourism venture, and fresh IPO activity suggest efforts to stimulate investment and diversification, the overall outlook underscores the urgency of translating financial stability and surplus liquidity into productive investment and sustained economic growth.
NEPSE gains over 31 points on first trading day of the week
The Nepal Stock Exchange (NEPSE) index rose by 31.12 points on Sunday, the first trading day of the week, closing at 2,672.55 points. The index gained 1.17 percent, while the Sensitive Index increased by 4.70 points to 459.43. A total of 16.61 million shares of 338 companies were traded through 95,445 transactions, generating a turnover of Rs 8.40 billion. All 13 sectoral indices closed higher, with finance, development banks, and manufacturing among the top gainers.
Gold price rises by Rs 600 per tola
Gold prices increased in the domestic market on Sunday, while silver prices declined. According to the Federation of Nepal Gold and Silver Dealers’ Associations, gold was traded at Rs 277,800 per tola, up Rs 600 from Friday. Silver fell by Rs 20 to Rs 5,625 per tola. The Federation attributed the price fluctuations to changes in international markets, exchange rates, and geopolitical factors. Internationally, gold was trading at around USD 4,596 per ounce and silver at USD 90 per ounce.
NRB absorbs Rs 20 billion to manage excess liquidity
Nepal Rastra Bank (NRB) has withdrawn Rs 20 billion from the banking system to manage excess liquidity. The central bank invited banks and financial institutions to submit bids for its 84-day deposit collection instrument, with interest rates determined through a competitive bidding process. Repayment is scheduled for March 29. NRB has absorbed nearly Rs 200 billion over the past month as weak credit demand has led to surplus liquidity. Banks are currently estimated to be holding excess liquidity of around Rs 800 billion, pushing interest rates below 2.75 percent.
CNI urges political parties to focus on economy in election manifestos
The Confederation of Nepalese Industries (CNI) has called on political parties to give greater priority to economic agendas in their election manifestos ahead of the upcoming polls. Speaking at a program on Sunday, CNI President Birendra Raj Pandey emphasized the need for timely government formation and a clear political and economic exit strategy. He noted that political issues appear to dominate current discourse, while concrete plans and roadmap for economic recovery remain lacking. Pandey pointed out that despite political transformations occurring nearly every decade, Nepal’s average economic growth has shown little improvement. He expressed concern over the declining contribution of the production and industrial sectors and the growing dominance of the service sector. CNI recommended creating an investment-friendly environment, ending frequent changes to tax policies, reducing administrative hurdles, and eliminating the need to approach multiple agencies for a single service.
Karnali Province records low capital spending in first half of fiscal year
The Karnali Province government has utilized only 13.74 percent of its total budget during the first six months of the current fiscal year. According to provincial data, just 7.90 percent of the capital budget and 23.83 percent of recurrent expenditure have been spent so far. Of the Rs 19.98 billion allocated for development projects, only Rs 1.57 billion has been used. Karnali Province Comptroller Office Chief Ratna Subedi said that out of the Rs 12.39 billion allocated for current expenses, Rs 2.95 billion has been spent, which is nearly three times higher than capital expenditure. The Ministry of Physical Infrastructure and Urban Development has spent Rs 1.8 billion out of its Rs 10.73 billion allocation. Budget execution by the Ministry of Water Resources and Energy Development has been particularly weak, with spending of just Rs 205.9 million from an allocated Rs 3.55 billion.
Investment Board Nepal to operationalize one-stop service center
The Investment Board Nepal (IBN) is preparing to launch a One-Stop Service Center aimed at providing faster and more efficient services to attract domestic and foreign investment. Joint Secretary Hemraj Tamang has been appointed as the coordinator for the center. Fourteen government agencies have designated focal persons with decision-making authority to support its operations. These agencies include key ministries, Nepal Rastra Bank, and departments related to immigration, revenue, industry, customs, labor, electricity development, company registration, and telecommunications. Additional agencies may join as required.
Paddy production drops by 4.2 percent this fiscal year
Paddy production in Nepal has declined this year, according to preliminary estimates released by the Ministry of Agriculture and Livestock Development for fiscal year 2025/26. The ministry reported reductions in cultivated area, total output, and productivity. Paddy cultivation now covers 1,376,872 hectares, down 3.8 percent from last year’s 1,420,636 hectares. Total production is estimated at 5.71 million metric tons, a 4.2 percent decrease from last year’s 5.96 million metric tons. Productivity per hectare has also declined by 1.16 percent to 4.14 metric tons. Paddy contributes nearly 12 percent of agricultural GDP, while agriculture accounts for about 24.16 percent of Nepal’s overall GDP.
‘Rhino Cruise’ to begin operations from Gaindakot
Nepal’s first “Rhino Cruise” is set to begin operations on the Narayani River from Gaindakot in Nawalparasi (Bardaghat–Susta East) this month. The cruise, jointly operated by Rhino Water Entertainment Pvt Ltd and Hotel River Crown Pvt Ltd, aims to promote tourism rather than transportation. It will operate between Gaindakot Pulchowk and Devghat, with a focus on dinner cruises and onboard dining experiences to develop the area as a sustainable tourist destination.
Hotel Forest Inn opens IPO for Nepalis working abroad
Hotel Forest Inn Limited has opened applications for its initial public offering (IPO), beginning with Nepalis employed overseas. The company has issued 400,000 shares worth Rs 40 million at a face value of Rs 100 per share. Eligible applicants can apply for 10 to 200,000 shares until January 22. The IPO represents 20 percent of the company’s issued capital of Rs 2 billion. After completing allotment to migrant workers, shares will be offered to the general public. Infomerics Credit Rating Nepal has assigned the company an IRN BB- rating, indicating moderate risk.
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