KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Overall, the developments point to an economy showing mixed but cautiously improving signals amid structural and climate-related challenges. Record-high gold and silver prices suggest heightened risk aversion and inflationary pressures, while rising real estate revenue despite fewer transactions indicates regulatory easing rather than a full market recovery.
Monetary and capital market regulators have moved to stimulate credit flow and investment by shortening loan upgrade timelines and lowering mutual fund seed capital requirements, signaling a policy push to revive liquidity and confidence. At the same time, the cancellation of Nepal Telecom’s controversial tender reflects growing scrutiny over governance and transparency in public procurement.
On the real economy front, the replacement of the PMEP with a skills-focused employment program marks a strategic shift toward sustainable job creation, even as declining paddy production underscores persistent vulnerabilities from climate stress, migration, and land-use change.
Provincial fiscal data reveal uneven performance—Bagmati shows moderate revenue mobilization, while Sudurpashchim’s weak capital spending highlights implementation bottlenecks—contrasting with long-term public investment commitments such as the planned expansion of Bhaktapur Hospital, which signals continued prioritization of social infrastructure despite broader economic constraints.
Gold and silver prices reach new highs
Gold and silver prices surged to record levels on Monday. Gold prices rose by Rs 4,200 per tola (11.66 grams), reaching Rs 282,000 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Association. The previous day, gold was traded at Rs 277,800 per tola, while the earlier record of Rs 278,000 per tola was set last Wednesday. Silver prices also climbed sharply, increasing by Rs 185 per tola to reach Rs 5,810. On the previous day, silver was traded at Rs 5,625 per tola. The all-time high for silver remains Rs 6,655 per tola, recorded last Wednesday.
Real estate revenue rises by Rs 1.11 billion despite fewer transactions
Government revenue from land transactions increased by Rs 1.11 billion in the first half of the current fiscal year compared to the same period last year. The Department of Land Management and Archive reported total collections of Rs 21.954 billion from around 702,000 transactions. Although transaction volumes declined by 7,000, revenue rose following the government’s decision to ease land plotting regulations. Monthly figures show the highest collection last month at Rs 5.17 billion. According to the Nepal Land and Housing Developers’ Federation, the real estate market is recovering, though activity remains below levels seen three years ago.
NRB shortens loan upgrade timeline to three months
Nepal Rastra Bank (NRB) has revised its loan classification rules, allowing non-performing loans to be reclassified as “good” just three months after borrowers fully repay both principal and interest. Previously, borrowers were required to remain on a six-month watch list before their credit status could be improved. The revised provision is intended to ease pressure on borrowers while helping banks clean up their balance sheets. Under the new directive, NRB has also allowed microfinance institutions to mobilize up to 50 percent of their Customer Protection Fund to assist families of borrowers affected by natural disasters or accidental incidents. These policy changes are expected to improve credit circulation and support the recovery of distressed businesses.
SEBON cuts mutual fund seed capital requirement to 5 percent
The Securities Board of Nepal (SEBON) has amended the Mutual Fund Regulations, 2010, lowering the mandatory seed capital requirement for fund managers. While fund managers must still contribute 15 percent seed capital for their first scheme, subsequent schemes will now require only 10 percent or as little as 5 percent, depending on performance and regulatory ratings. SEBON stated that the revision is aimed at encouraging better governance, compliance, and market participation. To manage risks linked to larger fund sizes, fund managers have been instructed to conduct stress tests and adopt strict risk management frameworks. The regulator believes the changes will strengthen the secondary market and boost investor confidence.
Nepal Telecom scraps disputed Rs 5 billion billing system tender
Nepal Telecom has canceled a controversial tender worth around Rs 5 billion for the procurement of a convergent real-time billing system. The decision was announced on Monday, coinciding with the transfer of Communication Secretary Radhika Aryal. The procurement process had faced criticism over alleged “vendor lock-in” provisions favoring Chinese technology firm Huawei. A probe led by former secretary Maniram Gelal found that technical specifications were tailored in a way that restricted competition. Nepal Telecom spokesperson Rabinman Manandhar said the tender documents will be revised based on expert recommendations before launching a new international bidding process to ensure transparency and stronger cybersecurity safeguards.
Ministry replaces PMEP with national employment promotion program
The Ministry of Labor, Employment, and Social Security has officially discontinued the Prime Minister Employment Program (PMEP), replacing it with the National Employment Promotion Program Guidelines, 2025. Approved a month ago, the new framework supports the Internal Employment Promotion Decade (2025–2035) announced by KP Oli. The program focuses on unemployed youth and returnee migrant workers across all 753 local governments, prioritizing skill development, entrepreneurship, and productive employment rather than short-term manual work. Funding will be provided through federal allocations and development partners to ensure sustainable job creation and strengthen the domestic labor market.
Paddy production expected to decline by 4.20 percent
The Ministry of Agriculture and Livestock Development has projected a 4.20 percent drop in paddy production this year, amounting to a decline of 250,350 metric tons compared to last year. Total output is estimated at around 5.7 million metric tons, down from 5.9 million metric tons previously. The total area under paddy cultivation has also decreased by 3.8 percent to approximately 1.3 million hectares. Ministry Information Officer Mahananda Joshi attributed the decline to drought conditions in Madhesh Province, youth migration, and the conversion of agricultural land for industrial purposes. Despite adequate supplies of seeds and fertilizers, unfavorable weather significantly reduced productivity.
Bagmati Province raises Rs 17.43 billion in revenue in six months
Bagmati Province collected Rs 17.435 billion in revenue during the first half of fiscal year 2025/26, achieving 25.84 percent of its annual target. Revenue from major sources such as land registration and vehicle taxes totaled Rs 9.725 billion. Land registration contributed Rs 2.16 billion, while vehicle taxes generated Rs 2.638 billion. Provincial authorities cited liquidity constraints in the economy and damage caused during the Gen Z protests on September 8 and 9, 2025, as major factors limiting revenue growth.
Sudurpashchim capital spending limited to 5 percent in first half
The Sudurpashchim Province government has utilized only 5.08 percent of its capital budget in the first six months of fiscal year 2025/26. According to the Provincial Treasury Controller Office, just Rs 1.7 billion was spent out of the allocated Rs 19.83 billion for infrastructure projects. Chief Minister Kamal Bahadur Shah had directed ministries to submit progress plans within 15 days on December 29, 2025, but several agencies reportedly failed to comply. Economic Affairs Minister Bahadur Singh Thapa blamed delays on disruptions caused by Gen Z protests, which resulted in the destruction of key documents and administrative paralysis.
Bhaktapur Hospital to construct Rs 620 million modern facility
Bhaktapur Hospital, which has been in operation for 121 years, will receive a new modern building with an investment of Rs 620 million from the Bagmati Province government. Health Minister Kiran Thapa said the Detailed Project Report (DPR) has been approved. The new facility will feature earthquake-resistant architecture inspired by traditional design and aims to transform the hospital into a provincial referral center. Planned services include specialized cardiac and neurological care, along with advanced ICU, NICU, and digital imaging units. Construction will take place within the existing hospital premises.
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