KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economy presents a mixed and fragile outlook, with moderate improvements in revenue collection, land transactions, infrastructure spending, and economic data gathering contrasting sharply against weak foreign investment realization, rising fiscal irregularities, stressed microfinance institutions, and a severe downturn in the tourism sector.
While NEPSE remained relatively stable and gold prices continued to rise amid regional tariff concerns, investor confidence appears cautious due to liquidity pressures and limited dividend payouts in the financial sector. The widening gap between approved and actual FDI inflows, coupled with growing loan defaults and provincial arrears, highlights persistent structural and governance weaknesses in the economy.
At the same time, initiatives such as expanded overseas employment opportunities, organic agricultural practices, and new infrastructure commitments indicate ongoing efforts to stimulate economic activity and employment. Overall, the developments reflect an economy balancing between gradual recovery and deep-rooted institutional and financial challenges.
NEPSE slips slightly as turnover reaches Rs 2.45 billion
The Nepal Stock Exchange (NEPSE) edged down by 1.03 points on Monday to close at 2,730.91, marking a minor decline of 0.03 percent from the previous session. Despite the dip in the benchmark index, the sensitive index gained 0.50 points to settle at 468.05, while both the float index and sensitive float index posted marginal increases. A total of 5,828,604 shares changed hands through 43,309 transactions, generating a turnover of Rs 2.45 billion across 339 listed companies. Market performance remained mixed, with 119 companies advancing, 132 declining, and 18 remaining unchanged. Among sectoral indices, development banks and commercial banks recorded gains, whereas insurance, manufacturing, and microfinance sectors mostly ended lower.
Gold prices increase while silver declines
Gold prices increased in the domestic market on Monday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of hallmark gold rose by Rs 800 per tola (11.66 grams), reaching Rs 294,800 per tola. On the previous day, hallmark gold had been traded at Rs 294,000 per tola. In contrast, silver prices declined by Rs 20 per tola and are currently being traded at Rs 5,040 per tola, compared to Rs 5,060 per tola on Sunday.
Economic census achieves 87.08 percent progress
The National Statistics Office stated that 87.08 percent of data collection for the second National Economic Census 2026 has been completed. Speaking at a press conference in Thapathali on Monday, officials said the field survey, which began on April 15, is scheduled to conclude on June 21. More than 800,000 physical forms and 10,000 e-Census tokens have been distributed nationwide by field enumerators. The collected data is expected to strengthen Gross Domestic Product (GDP) estimation, revise statistical sampling frameworks, and support local governments with reliable data for socio-economic planning. During the event, media representatives also called for more flexible municipal tax policies to support struggling local media networks.
Foreign investment commitments fall to only 14 percent realization
The 63rd Annual Report of the Auditor General highlighted a growing disparity between approved foreign direct investment (FDI) commitments and actual inflows into Nepal. In fiscal year 2024/25, investment proposals worth Rs 79.69 billion from 1,009 foreign investors received approval. However, only 97 investors brought capital into the country, amounting to just Rs 11.30 billion, or 14 percent of the pledged total. The report noted that the situation has worsened compared to fiscal year 2022/23, when 28 percent of approved commitments materialized, equivalent to Rs 9.2 billion out of Rs 32.48 billion. The audit report urged the government to ensure policy consistency and simplify administrative procedures to improve actual investment inflows.
Gold traders seek customs duty hike as prices reach Rs 294,800
After India raised its gold import duty to 15 percent, including a 10 percent basic customs tariff and a 5 percent agricultural infrastructure levy, the Federation of Nepal Gold and Silver Dealers’ Associations urged the Nepali government to raise local customs duties to 16 percent. India reportedly spent Rs 71 billion on gold imports in 2025/26 due to rising outflows linked to the United States market, making gold its second-largest import expenditure. Local traders argued that aligning tariffs is necessary to curb cross-border smuggling along the open border caused by price disparities. On Monday, the price of 24-karat gold in Nepal stood at Rs 294,800 per tola (11.66 grams), compared to Rs 296,222 in India. Nepal’s commercial banks currently maintain a reserve of 105.5 kilograms of gold.
Land revenue collection rises to Rs 6.263 billion in one month
Land revenue collection across Nepal increased steadily between April 14 and May 14, 2026, driven by a rebound in real estate transactions. Nationwide revenue reached Rs 6.263 billion during the period, up from Rs 6.165 billion collected between March 15 and April 13, 2026. Data from the Department of Land Management and Archive showed that the latest revenue included Rs 344 million from service charges, Rs 3.319 billion from registration fees, and Rs 2.552 billion from capital gains tax. Additionally, the Chief Minister’s Cleanliness Campaign Fund collected Rs 44.8 million. The figures also indicated continued growth compared to the Rs 4.149 billion collected between February 13 and March 14, 2026.
Self-employment fund directed to recover Rs 66.68 crore in unpaid loans
The 63rd Annual Report of the Auditor General, published in 2026, revealed that the Youth and Small Entrepreneur Self-Employment Fund must recover Rs 666.8 million in overdue loans from 432 cooperative societies. According to the Self-Employment Fund Rules 2020, loans are issued under a five-year agreement with a 42-month repayment period, while defaults attract an additional 2 percent interest penalty. By July 16, 2025, outstanding principal liabilities had reached Rs 2.339 billion. Of the unrecovered amount, Rs 579.7 million represents overdue principal, Rs 84.6 million accumulated interest, and Rs 20.3 million accrued penalties.
Gen Z protests slash tourism sector profits by 75.89 percent
Third-quarter financial reports for fiscal year 2025/26 revealed a sharp downturn in Nepal’s hospitality industry, with total sector profits plunging 75.89 percent to Rs 261.8 million from Rs 1.08 billion a year earlier. Reduced operating income and disruptions caused by recent Gen Z protests significantly affected hotel operations and tourism activity. Taragaon Regency posted a loss of Rs 144.8 million, compared to a profit of Rs 337.5 million in the previous year. Chandragiri Hills reported a Rs 9.3 million loss, while City Hotel recorded a deficit of Rs 138.7 million. In contrast, Kalinchowk Darshan defied the broader trend by increasing profits by 314 percent to Rs 49.6 million, while Soaltee Hotel registered a 12.18 percent rise in net profit to Rs 550.7 million.
Karnali Province arrears climb to Rs 4.735 billion despite fiscal controls
The 63rd Annual Report of the Auditor General disclosed that accumulated arrears in Karnali Province increased to Rs 4.735 billion. Financial irregularities rose from 1.22 percent in fiscal year 2023/24 to 2.08 percent in 2024/25, the second-highest rate among provinces after Madhesh Province, which recorded 3.77 percent. During the latest audit cycle, an additional Rs 773.5 million in arrears was identified across 137 provincial offices following the review of Rs 37.198 billion in expenditures. The report also pointed to weak budget execution, noting that the province spent only 63.67 percent of its Rs 31.41 billion allocation, reflecting poor fiscal performance.
Govt approves Rs 1.16 billion for five Rolpa infrastructure projects
The government has approved multi-year funding commitments for five major road and motorable bridge projects in Rolpa district, allocating a total infrastructure budget of Rs 1.16 billion. The package includes Rs 792.9 million for the Mirul–Chherlabang road section under the Shahid Marga corridor. Funding allocations for bridge construction include Rs 119.7 million for Tarkebang Bridge, Rs 67.2 million for the Hungari River Bridge, Rs 100 million for the Pachhabang Bridge, and Rs 80.5 million for the Lalubang Bojheng River Bridge. Each bridge project has also received an initial allocation of Rs 30 million in the current fiscal year to begin tendering and contract procedures immediately.
Inland Revenue Office Hetauda collects Rs 5.926 billion in 10 months
The Inland Revenue Office in Hetauda, Makwanpur, collected Rs 5.926 billion in revenue during the first 10 months of fiscal year 2025/26, covering the period from July 17, 2025, to May 14, 2026. Revenue collection increased by Rs 3.4 million compared to the same period in fiscal year 2024/25, driven by intensified tax recovery campaigns and stricter market monitoring. As of May 14, excise duty contributed Rs 3.456 billion, income tax generated Rs 1.02 billion, and value-added tax (VAT) accounted for Rs 8.2 million. Likewise, health risk tax collection stood at Rs 5.1 million, interest tax reached Rs 683,770, and rent tax contributed Rs 159,880. The office is working toward achieving its annual revenue target of Rs 8.44 billion.
Malaysian Embassy faces criticism over restricted health screening system
The Malaysian Embassy in Nepal issued a public notice declaring that medical examinations for outbound migrant workers would remain limited to 36 designated clinics operating under the Bio-Medical System (BMS). The move contradicts the Ministry of Labor’s recently introduced anti-syndicate policy, which aimed to allow all qualified health institutions to participate in the recruitment process. Following a government decision on March 31, at least 53 medical institutions, including two government hospitals, had submitted applications for inclusion. Despite this, the embassy maintained that under the labor agreement signed in October 2018, only the original 36 clinics are authorized to process workers for a standard service charge of Rs 3,000 through Macro Tech and Bestinet Sdn Bhd.
Israel to recruit 2,300 Nepali caregivers through G2G mechanism
The Department of Foreign Employment announced that Israel is preparing to hire an additional 2,300 Nepali caregivers for long-term care centers under the government-to-government (G2G) labor agreement. The recruitment process had previously been suspended due to the House of Representatives elections in Nepal and escalating conflict in West Asia. Under the bilateral arrangement, an official recruitment notice must be published within 40 days after the Population and Immigration Authority (PIBA) in Jerusalem submits its demand letter. Applicants must be between 25 and 45 years old, weigh at least 45 kilograms, and possess either specialized nursing qualifications or secondary-level education accompanied by an officially recognized caregiver certification.
NADEP Laghubitta decides against dividend distribution
The Board of Directors of NADEP Laghubitta Bittiya Sanstha, during its meeting held on May 15, resolved not to distribute dividends to shareholders for the current fiscal period. Instead of issuing cash or bonus shares, the microfinance institution decided to retain its earnings within the company. The decision reflects a broader trend of capital preservation among microfinance institutions facing difficult economic conditions. Final endorsement of the decision will take place during the company’s upcoming annual general meeting, where its financial statements will also be reviewed.
Vijaya Laghubitta to withhold shareholder dividends
The Board of Directors of Vijaya Laghubitta Bittiya Sanstha, in a meeting held on May 14, decided not to provide dividend payouts to shareholders for the current period. As a result, investors will not receive returns from the institution’s recent earnings. Similar to several other microfinance companies dealing with liquidity pressure and operational challenges, the institution chose to strengthen internal reserves instead of distributing profits. The proposal will be presented for final approval at the company’s next annual general meeting.
Bio-fertilizer used as an alternative to pesticides
The National Agricultural Modernization Project, Jomsom, has started using a “bio-solution” as an alternative to chemical pesticides to control pests and diseases in fruit crops. The project, which operates in Myagdi, Mustang, Baglung, and Parbat, has named the biological solution prepared from a mixture of local herbs and grasses “Epiphytic Lactic Acid Bacteria.” Project chief Bharatraj Gautam said the solution, which was tested in the office’s apple orchard last year, has been introduced in the apple orchards of Mustang farmers from this year. Farmers are being encouraged to use organic solutions because they are healthier, environmentally friendly, cost-effective, and can be prepared locally.
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