KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy currently reflects a mix of emerging opportunities and structural challenges shaped by policy shifts, external shocks, and uneven sectoral performance.Taken together, these developments point to an economy navigating uneven adjustment pressures, where policy shifts, external shocks, and structural inefficiencies are producing mixed outcomes across sectors.
On one hand, declining LPG demand and surplus inventories reflect both rapid behavioral change toward electrification and unintended consequences of short-term government intervention, while rising bottled water prices highlight vulnerability to global supply chain disruptions and imported cost pressures.
Public finance trends are similarly imbalanced: revenue collection shows moderate resilience but remains below targets due to liquidity constraints and sector-specific declines, while persistently low capital expenditure—especially in Tanahun—signals weak project execution capacity and risks undercutting long-term growth.
In contrast, tourism and aviation segments demonstrate localized dynamism, with improved infrastructure and new destinations driving activity, suggesting pockets of opportunity. Globally, falling oil prices and rising precious metal demand underscore how geopolitical developments continue to transmit volatility into domestic markets.
Overall, the picture is one of partial recovery constrained by structural bottlenecks, policy trade-offs, and external dependencies.
Gas industries face surplus as demand drops by 50%
Gas companies are dealing with excess cylinders and idle LPG transport tanks as demand has fallen by half. This decline follows a March 12 government decision to distribute smaller 7.1 kg cylinders to address a temporary shortage, along with a growing shift toward electric cooking. Industry operators have urged the Nepal Oil Corporation to permit sales of standard 14.2 kg cylinders again, arguing the smaller-cylinder policy has raised transport costs and created logistical issues with refilling empties. Around 13,000 metric tons of gas currently remain stored across companies and in 350 transport tanks.
Capital expenditure remains low in Tanahun at 20.73%
Development spending in Tanahun has been slow, with federal capital expenditure reaching just 20.73% of its Rs 3.457 billion budget so far. Likewise, Gandaki Province has spent only 33.16% of its allocated development funds in the district. Recurrent spending stands higher at 75.52%, largely due to administrative and election-related costs. Delays in procurement and bidding processes have slowed infrastructure projects, increasing pressure to complete work before the fiscal year ends in mid-July.
Bottled water prices rise by 40%
The Nepal Bottled Water Industries Association has raised the price of processed drinking water after production costs climbed by 40%, mainly due to higher prices for bottles, caps, and packaging materials. Increased petroleum costs have also pushed up transportation expenses. The association said global geopolitical tensions involving Iran, Israel, and the United States have disrupted supply chains, affecting the viability of Nepal’s 620 water industries. With over Rs 16 billion invested and 30,000 people employed directly, the price hike is seen as essential to sustain operations and maintain quality.
Bagmati Province collects Rs 27.933 billion in revenue
Bagmati Province generated Rs 27.933 billion in revenue in the first nine months of fiscal year 2025/26 (July 17, 2025, to April 13, 2026), achieving 41.40% of its annual goal. Most revenue came from real estate registration and vehicle taxes, though collections were affected by liquidity constraints and damage to offices during the Gen Z protests in September. The province also received Rs 7.942 billion in equalization grants from the federal government during this period.
Kailali customs office collects Rs 6.327 billion in nine months
The Kailali Customs Office in Dhangadhi collected Rs 6.327 billion in revenue over the first nine months of fiscal year 2025/26. This includes Rs 2.294 billion from customs duties and Rs 2.522 billion from VAT. The office has achieved 65.15% of its annual target of Rs 9.711 billion, with monthly targets met only in March. In comparison, it collected Rs 8.669 billion in the previous fiscal year.
Tourist arrivals pick up in the Kanchanjunga region as weather improves
The Kanchanjunga region, which includes the world’s third-highest peak, has welcomed 165 foreign visitors over the past month. The main trekking seasons fall between March–May and September–November. To accommodate growing numbers, infrastructure has expanded, with 52 hotels now operating along trekking routes, including the newly built Singi Namjong Hotel in Gyapla, developed at a cost of over Rs 70 million. Improved trail conditions have significantly reduced travel time, allowing trekkers to complete a round trip to both base camps in 11 to 16 days, compared to the earlier 24-day journey from Phungling.
Internal revenue office Bharatpur increases collection by Rs 1.471 billion
The Internal Revenue Office in Bharatpur collected Rs 18.055 billion by mid-April, marking an increase of Rs 1.471 billion compared to the same period last year. However, it reached only 87.59% of its target, partly due to reduced excise revenue after a major liquor factory in Jugedi shut down. The office currently oversees 74,379 business taxpayers and 186,573 individual taxpayers. Authorities are working to recover more than Rs 5 billion in outstanding dues and resolve Rs 2.158 billion in audit discrepancies.
Resunga airport increases weekly flight frequency to Kathmandu
Nepal Airlines Corporation has increased flights between Resunga Airport in Gulmi and Kathmandu to four times a week—on Sundays, Tuesdays, Thursdays, and Saturdays. After aircraft maintenance and rising fuel costs, one-way fares have been raised to Rs 10,902 from Kathmandu and Rs 10,702 from Resunga. Despite the Rs 3,402 increase, the 45–50 minute flight remains a preferred option compared to the 16-hour road journey. Commercial flights at the airport began on May 12, 2023.
Surkhet develops into a hub for adventure paragliding
Surkhet, the capital of Karnali Province, is emerging as a key destination for paragliding, particularly in the Bayalkanda area. Flights operate from an altitude of around 1,500 meters, with companies such as Welcome Paragliding offering daily services guided by trained pilots. The activity has gained popularity among both locals and professionals, contributing to economic growth and supporting the ‘Karnali Prosperity 2026/27’ initiative. Flights usually take off from the Chure foothills and land in Birendranagar-1, providing scenic aerial views that have boosted local tourism, hospitality, and transport sectors.
Kokhedanda and Hampal gain popularity as new tourist destinations
Kokhedanda and Hampal in Parbat are attracting a growing number of domestic and international visitors, thanks to their natural beauty and blooming rhododendron forests. Kokhedanda, located at an altitude of 3,309 meters, now features a newly constructed cottage built with an investment of Rs 12 million. Hampal, nearby, is known for its 12 varieties of rhododendrons in multiple colors, including red, white, yellow, and blue. Recent upgrades such as electrification and improved road access have made these sites more accessible. Visitors can enjoy panoramic views of 16 Himalayan peaks, including Annapurna and Dhaulagiri, drawing interest from trekkers, students, and researchers.
Precious metal prices rise after Hormuz reopening announcement
Global markets saw a notable increase in precious metal prices after Iran announced the reopening of the Strait of Hormuz for commercial shipping. Gold futures for June delivery rose by about 2% on the New York Mercantile Exchange, while silver prices for May increased by more than 4%. Analysts link the surge to a drop in crude oil prices, which weakened the U.S. dollar and encouraged investors to move toward safer assets like gold and silver. Iran stated that the route would remain open as long as the ceasefire in Lebanon continues.
Global oil prices fall as Iran reopens the Strait of Hormuz
Oil prices in the international market declined sharply following Iran’s decision to reopen the Strait of Hormuz during the ceasefire period. Brent crude fell from around USD 98 per barrel to approximately USD 88. The strait is a vital global shipping route, responsible for transporting nearly 20% of the world’s oil and gas supply. While stock markets responded positively—evidenced by a 1.2% rise in the S&P 500—shipping organizations such as BIMCO and the International Maritime Organization remain cautious, highlighting ongoing risks like sea mines and the need for stronger safety guarantees.
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