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 cautiously reform-oriented economic landscape in Nepal. While the drop in gold and silver prices suggests short-term market correction after recent highs, broader structural signals are more significant: the removal of the Rs 500 million cap on foreign investment indicates a clear policy push to attract larger capital inflows and accelerate industrial growth.
At the same time, fiscal prudence is evident in the preparation of a new budget ceiling shaped by revenue realities and debt sustainability. However, risks persist—particularly in the power sector, where Rs 200 billion in private investment faces uncertainty due to policy bottlenecks, and in governance areas highlighted by potential blacklisting of contractors.
Local revenue growth, entrepreneurial subsidies, strong institutional ratings like CIT’s A+, and agricultural income gains show pockets of resilience, yet disaster losses and infrastructure challenges underscore ongoing structural vulnerabilities. Overall, the picture is one of reform momentum tempered by regulatory, implementation, and sector-specific risks.
Gold prices fall by Rs 1,500 per tola
Gold and silver prices declined in the domestic market on Wednesday. The Federation of Nepal Gold and Silver Dealers’ Association set the price of fine gold at Rs 300,400 per tola, down Rs 1,500 from Tuesday. Silver fell by Rs 5 to Rs 4,880 per tola. Earlier in the week, gold had reached Rs 305,800 per tola, while silver traded at Rs 4,985 on Sunday.
Nepal scraps Rs 500 million cap on foreign investment
The government has eased foreign investment procedures by eliminating the previous Rs 500 million ceiling under the automated online approval system. Following a recent Cabinet decision, investments of any size in 102 business categories across seven industrial sectors—including energy, tourism and information technology—can now receive automatic approval. Investors are issued certificates via email within seven working days of submitting online applications. In the first seven months of fiscal year 2025/26, foreign investment commitments totaled Rs 40.28 billion.
PPMO seeks clarification from 15 construction firms
The Public Procurement Monitoring Office (PPMO) on February 19 sought written explanations from 15 construction companies and suppliers over potential blacklisting. The firms have been given seven days to respond to complaints lodged by public agencies. Earlier 30-day notices went unanswered. Under existing regulations, blacklisted companies are barred from participating in public procurement and bidding for the duration of the penalty.
Budget ceiling report for FY 2026/27 submitted
The Budget Ceiling Determination Committee handed over the fiscal year 2026/27 expenditure ceiling report to the Ministry of Finance on February 18. The current fiscal year’s budget was initially set at Rs 1.964 trillion but later reduced by 14 percent. The upcoming ceiling factors in revenue performance, foreign grants and public debt sustainability. Although the exact figure has not been disclosed, officials said it allows flexibility for the incoming government to align spending with its policies and priorities.
IPPAN flags Rs 200 billion power sector investment at risk
The Independent Power Producers’ Association, Nepal (IPPAN), has cautioned that Rs 200 billion invested in electricity generation licenses is in jeopardy. While licenses have been issued for projects totaling 36,000 megawatts, Power Purchase Agreements cover only 12,500 megawatts. The shortfall affects more than 100 developers and associated financial institutions. IPPAN has urged authorities to address policy issues related to open access and wheeling charges, and to permit private producers to sell electricity domestically and internationally if the Nepal Electricity Authority cannot absorb total output.
Nineteen disaster incidents cause Rs 3.4 million losses
The National Disaster Risk Reduction and Management Authority recorded 19 disaster events between 10:00 am on February 17 and the morning of February 18. Fifteen were fire incidents attributed to negligence during the dry winter season. The events injured six people and caused property damage worth Rs 3.4 million in districts including Tehrathum, Sankhuwasabha, Morang, Siraha, Sarlahi and Syangja. Authorities urged heightened caution amid elevated fire risks.
Unauthorized calendar publication may incur Rs 100,000 fine
The Nepal Panchanga Nirnayak Bikas Samiti has warned that publishing calendars without prior approval may attract fines of up to Rs 100,000. As per the fiscal year 2020/21 formation order, institutions must obtain permission before publication. Fees range from Rs 2,000 for educational institutions to Rs 10,000 for commercial calendars. Violations carry penalties between Rs 10,000 and Rs 100,000, with District Administration Offices overseeing enforcement.
Gandaki selects 55 entrepreneurs for Rs 20 million support
Under the “Entrepreneurial Gandaki” initiative, the Ministry of Industry and Tourism has chosen 55 rural entrepreneurs for financial assistance. The Rs 30 million program includes Rs 20 million from the provincial government and Rs 1 billion from five participating local units. Beneficiaries investing at least Rs 1,067,000 of their own funds will receive a Rs 100,000 subsidy for technology upgrades. The scheme aims to modernize agriculture, tourism and service sectors in Tanahu, Gorkha, Parbat and Baglung.
Hetauda sub-metropolitan city collects Rs 224.5 million revenue
Hetauda Sub-Metropolitan City generated Rs 224.5 million in revenue during the first seven months of the current fiscal year, slightly up from Rs 224.3 million during the same period last year. Major sources included property tax (Rs 55.4 million), house rent tax (Rs 34.4 million) and business tax (Rs 17.1 million), along with map approval fees and infrastructure service charges.
Surkhet police collect over Rs 900,000 in traffic fines
The Surkhet District Police Office collected Rs 939,000 from traffic violations between mid-January and mid-February. A total of 1,022 drivers faced action during the period. Road accidents claimed five lives—two men and three women—while 23 people were seriously injured and 61 sustained minor injuries. Police said monitoring efforts would continue to improve road safety.
Annapurna farmers earn Rs 38.8 million from oranges
Farmers in Annapurna Rural Municipality, Kaski, generated Rs 38.8 million from orange sales this season. More than 200 farmers sold produce valued between Rs 50,000 and Rs 2 million. Despite a 40 percent drop in output, revenues rose as prices doubled to Rs 200 per kilogram. Harvesting concluded on February 14. Oranges remain the region’s second-largest cash crop after potatoes.
CIT receives ‘A plus’ rating from ICRA Nepal
ICRA Nepal has assigned an “A Plus” (A+) rating to the Citizen Investment Trust (CIT), indicating a strong capacity to meet financial obligations on time. Established in fiscal year 1990/91, the trust manages programs such as the Employee Savings Growth Retirement Fund and the Citizens Pension Scheme, serving more than 700,000 participants nationwide.
Technical glitch diverts Turkish Airlines flight to Dhaka
Turkish Airlines flight TK726, operated by an Airbus A330, diverted to Dhaka after encountering a technical issue while attempting to land at Tribhuvan International Airport at 11:10 am. The crew executed an overshoot, and officials clarified that the problem was aircraft-related, not runway-related. The plane landed safely in Dhaka. The incident follows a February 4 diversion to Kolkata due to an engine fire shortly after takeoff.
Comment