KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economic landscape presents a mixed picture, marked by weakening market sentiment, rising fiscal pressures, and persistent structural challenges despite signs of growth in several sectors. The stock market continued to lose momentum, with NEPSE falling for another session amid declining turnover, while precious metal prices also softened, reflecting cautious investor behavior.
At the macroeconomic level, public debt has climbed to nearly Rs 3 trillion, even as the government pushes ambitious infrastructure and development plans. Trade and industrial concerns remain prominent, with tea factory closures caused by export disruptions to India, delays in expanding electricity exports, and disputes over industrial lease fees highlighting Nepal’s vulnerability to external markets and policy bottlenecks.
At the same time, positive indicators emerged through the doubling of businesses in Bara, rising domestic tourism at Chitwan National Park, stronger provincial revenue in Lumbini, and the near completion of the National Economic Census.
However, governance and implementation gaps continue to undermine progress, evidenced by stalled highway construction due to material shortages, an unused cold storage facility affecting farmers, audit irregularities in Nepalgunj, and demands for investigations into alleged misuse of public funds. Overall, the developments underscore an economy with growth potential but constrained by weak execution, regulatory hurdles, and dependence on external trade and infrastructure coordination.
NEPSE declines 5.06 points as turnover drops to Rs 3.41 billion
The Nepal Stock Exchange (NEPSE) fell by 5.06 points on Thursday to close at 2,700.47 amid continued market volatility. Daily turnover declined to Rs 3.414 billion from Rs 3.637 billion recorded a day earlier. Of the 347 companies traded, share prices of 181 declined while 77 advanced. Most sectoral indices, including investment, hotels, hydropower, and insurance, ended lower, while microfinance and mutual fund sectors posted modest gains. The Sensitive Index also slipped, reflecting weak investor sentiment and declining market activity throughout the week.
Gold and silver prices decline
Prices of both gold and silver fell on Thursday, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold dropped by Rs 100 per tola (11.66 grams) to Rs 297,200, down from Rs 297,300 on Wednesday. Silver also declined by Rs 35 per tola, falling to Rs 4,945 from the previous day’s rate of Rs 4,980.
Nepal’s public debt rises to Rs 2.96 trillion
Nepal’s outstanding public debt reached Rs 2.961 trillion by the end of the first 11 months of the current fiscal year, according to the Public Debt Management Office. Domestic borrowing accounted for Rs 1.377 trillion, while foreign loans totaled Rs 1.5839 trillion. The overall debt burden now stands at 44.87 percent of the country’s gross domestic product (GDP). Compared to the end of the previous fiscal year, the nation’s debt has increased by approximately Rs 287 billion.
NRB proposes mandatory whistleblower mechanism for banks and financial institutions
Nepal Rastra Bank (NRB) has proposed new regulatory provisions requiring banks and financial institutions to establish secure internal whistleblower systems. Included in a draft amendment to the Employee Service Regulations, the proposal would require institutions to create formal channels through which employees can confidentially report corruption, financial irregularities, abuse of authority, and workplace misconduct. The draft also bars retaliation, discrimination, or intimidation against whistleblowers and guarantees confidentiality. Employees who knowingly fail to report serious financial wrongdoing could face disciplinary action for violating professional conduct standards.
Delay in India talks hampers Nepal’s power export expansion plans
Nepal’s efforts to increase electricity exports to Bangladesh by an additional 20 MW have been delayed due to the postponement of the Nepal–India Joint Steering Committee meeting at the energy secretary level, which has not convened since February 2025. Nepal currently exports about 1,200 MW of electricity to India and 40 MW to Bangladesh, but further expansion and infrastructure approvals remain on hold. The delay has also affected progress on the Detailed Project Report (DPR) for the Chameliya–Jauljibi transmission line. Officials say the lack of high-level coordination is slowing regional energy integration and limiting opportunities for cross-border electricity trade.
Tea factories shut as export disruption affects industry
An unexpected restriction on Nepali tea exports to India has forced the closure of tea processing facilities in eastern Nepal. Since June 15, all 56 tea factories in Ilam have ceased operations, while 30 factories and 24 tea estates in Jhapa suspended production on Thursday. The Nepal Tea Association said warehouses have become overcrowded due to stalled exports, leaving producers unable to continue operations. The disruption threatens an industry that generates Rs 12–14 billion annually in Jhapa alone, including more than Rs 5 billion in exports to India, and supports around 60,000 workers. The Ministry of Industry says diplomatic efforts are underway to resolve the issue.
Economic census covers nearly 1.3 million businesses
The National Economic Census 2082 has entered its final phase, with data collected from approximately 1.298 million enterprises across Nepal. Conducted by the National Statistics Office, the nationwide survey began on April 15 and will conclude on June 21. A team of 3,906 enumerators has been deployed to gather information from businesses ranging from small enterprises to large industries. Officials have urged firms that have not yet participated to submit their information before the deadline to ensure accurate economic statistics and planning data.
Minister Lamsal unveils infrastructure investment plan worth Rs 1.15 trillion
Physical Infrastructure Minister Sunil Lamsal has outlined a three-year infrastructure development plan valued at Rs 1.15 trillion. Speaking in the House of Representatives, he said the ministry has allocated Rs 88.33 billion for urban development projects in 300 municipalities. The broader plan includes Rs 81.22 billion for the construction of 3,000 local bridges, Rs 63 billion for 2,800 kilometres of municipal roads, and Rs 5 billion for 10 football stadiums. The ministry also aims to reduce procurement processing time to seven months.
Bagmati allocates Rs 10 million for journalists’ welfare and insurance
The Bagmati Province government has set aside Rs 10 million in its upcoming budget to bring working journalists under social security and health insurance programs. The initiative is intended to strengthen professional protection and long-term welfare support for media workers across the province. According to the Federation of Nepali Journalists, more than 2,500 active journalists work in Bagmati’s 13 districts. Media organizations have welcomed the allocation and called for transparent implementation to ensure the benefits reach journalists working in the field.
Lumbini records 12 percent increase in internal revenue
Lumbini Province reported a 12 percent rise in internal revenue during the first 11 months of the current fiscal year, collecting Rs 5.14 billion by June 8, according to Provincial Finance Minister Dhanendra Karki. Total resources available in the provincial fund reached Rs 26.57 billion, including federal grants and revenue-sharing allocations. The province spent Rs 17.47 billion, equivalent to 44.85 percent of its budget, including Rs 10.11 billion in capital expenditure and Rs 7.36 billion in recurrent spending. Economic growth slowed to 2.87 percent from 4.27 percent last year, largely due to weaker performance in agriculture and services. Electricity coverage reached 98.6 percent, while internet access expanded to 80 percent of the population.
FNCCI objects to power disconnection plan affecting 700 factories
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has opposed a decision by Industrial Districts Management Limited to cut electricity supply to around 700 factories over unpaid lease-related charges. The dispute is linked to revised land lease fees, which are currently under review by the Supreme Court. FNCCI argued that disconnecting power with only seven days’ notice would be legally questionable and could further weaken the industrial sector. The federation has urged the Ministry of Industry to intervene and facilitate a resolution, offering to help mediate discussions between the parties.
Karnali allocates largest budget share to physical infrastructure
The Ministry of Physical Infrastructure and Urban Development received the largest allocation in Karnali Province’s budget for the upcoming fiscal year, securing Rs 10.932 billion from the province’s total budget of Rs 35.398 billion. The allocation includes Rs 650 million for 14 major transportation corridors and Rs 367.5 million for the construction of 122 suspension bridges. Fiscal transfers to Karnali’s 79 local governments have also been increased by 20.85 percent to Rs 5.547 billion to strengthen local development and service delivery.
Bitumen shortage stalls Arniko Highway expansion for two months
Road paving work on the Dhulikhel–Khava section of the Arniko Highway has been suspended for the past two months due to a shortage of imported bitumen. According to the Division Road Office in Bhaktapur, the base layer has been completed on 2.5 kilometres of the road, but final asphalt paving cannot proceed because of insufficient materials. Construction on the remaining 1.5 kilometres of the four-kilometre stretch has also been delayed, with maintenance crews currently filling potholes to ensure road safety. The project is being implemented by C-NA-1 Kali JV under a contract worth Rs 315.6 million and is scheduled for completion by mid-January 2027.
Sports groups demand probe into alleged misuse of provincial funds
Sports organizations in Khotang have called for an investigation into the alleged misuse of grants provided by the Koshi Province Sports Development Board. A memorandum submitted to the District Administration Office alleges that Rs 800,000 allocated for preparations related to the 10th National Games was mishandled. Of the total amount, Rs 656,000 was reportedly withdrawn in advance by officials, while another Rs 144,000 was spent during a football tournament in mid-2024. Local sports groups claim the funds were not returned despite written commitments and have demanded accountability and a financial audit.
Number of businesses doubles in Bara over seven years
The number of active businesses in Bara has nearly doubled over the past seven years, according to data from the District Economic Census Office. The National Economic Census 2026 recorded 21,074 operating enterprises across the district’s 16 local units, compared to 11,449 businesses documented during the first census in 2018. The survey, conducted by 66 enumerators and nine supervisors, covered both registered and unregistered establishments, including industries, hotels, and private schools. Local business representatives attribute the growth to increasing industrial activity around Special Economic Zones and dry port facilities.
Bharatpur revokes registration of 29 cooperatives
Bharatpur Metropolitan City has cancelled the registration of 29 cooperatives that failed to comply with legal and regulatory requirements. The action targeted inactive agricultural, dairy, and beekeeping cooperatives that repeatedly failed to submit annual financial statements, conduct mandatory audits, and hold annual general meetings. Municipal records show that these cooperatives also failed to update their information in the Cooperative Department’s online system. Following the cancellation, the number of registered cooperatives operating within the metropolitan area has fallen from 363 to 334.
Domestic tourism rises sharply at Chitwan National Park
Chitwan National Park has recorded a significant increase in domestic visitors following the implementation of the government’s two-day weekend policy. By mid-June, the park welcomed 48,598 Nepali tourists, compared to 31,577 during the same period last year. Officials said jeep safaris and wildlife observation continue to be the main attractions. The increase is being attributed to greater travel opportunities and increased leisure time for domestic visitors.
Makawanpur shuts down 40 unregistered pharmacies
Authorities in Makawanpur have closed 40 pharmacies operating without valid registration renewals. The District Administration Office said the enforcement drive targeted general, veterinary, and Ayurvedic pharmacies that failed to comply with registration requirements set by the Department of Drug Administration. Officials stated that the action was taken to strengthen regulatory compliance and safeguard public health standards.
Auditor General flags over Rs 106 million in irregularities in Nepalgunj
The Auditor General has identified financial irregularities totaling Rs 106.3 million in Nepalgunj Sub-Metropolitan City. The audit report highlighted more than Rs 20 million in questionable expenditures, including Rs 3.8 million spent outside approved budget headings and Rs 8.1 million used to purchase office equipment for federal agencies. The report also objected to Rs 325,000 distributed as monitoring allowances and Rs 5.6 million in procurement spending that allegedly bypassed competitive bidding procedures.
Unused cold storage facility causes losses for Kanchanpur farmers
Farmers in Dodhara Chandani Municipality of Kanchanpur are facing post-harvest losses because a government-built cold storage facility remains non-operational. Constructed by the Sudurpashchim Provincial Government in fiscal year 2022/23 at a cost of Rs 600,000, the facility has never been used due to the absence of a three-phase electricity connection. As a result, farmers continue to suffer losses from spoiled produce such as potatoes and onions, while also facing price instability. Local farmers say the unresolved power issue is limiting agricultural productivity and storage capacity.
Technical issue forces Buddha Air flight to return to Kathmandu
A Buddha Air flight bound for Biratnagar was forced to return to Kathmandu on Thursday after a technical problem was detected during the journey. Flight 707 departed from Tribhuvan International Airport at around 1:00 p.m. before pilots identified a mechanical issue and initiated standard safety procedures. The aircraft landed safely in Kathmandu, and all passengers were later transferred to another flight to continue their journey to Biratnagar without further disruption.
Comment