KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The developments reflect an economy navigating simultaneous pressures of political transition, fiscal strain, and structural reform. Rising gold and silver prices, along with projected election spending exceeding Rs 150 billion, point to heightened liquidity and short-term economic stimulus, but also signal inflationary risks.
At the same time, the massive Rs 84 billion damage from the Gen Z protests and slow capital expenditure in provinces such as Karnali expose fiscal vulnerabilities and implementation gaps. While policy initiatives, including energy expansion pledges, hydropower cost regulation, and streamlined foreign investment approvals, indicate a push toward long-term growth and structural transformation, governance challenges persist, as seen in cooperative fraud cases, food safety violations, and infrastructure funding shortages.
Growth in aviation and customs revenue suggests economic recovery momentum, yet the broader picture underscores the need for stronger fiscal discipline, institutional accountability, and efficient capital mobilization to ensure sustainable development.
Gold price rises by Rs 4,300 per tola
Gold prices increased on Thursday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold climbed by Rs 4,300 per tola (11.66 grams), reaching Rs 304,700. On Wednesday, gold had fallen by Rs 1,500 per tola to Rs 300,400. Silver prices also rose by Rs 180 per tola, bringing the rate to Rs 5,060. A day earlier, silver was traded at Rs 4,880 per tola.
Election spending expected to surpass Rs 150 billion
With the House of Representatives election set for March 5, total economic activity linked to the polls is projected to exceed Rs 150 billion. The government has arranged Rs 30 billion for election-related expenses, allocating Rs 10.39 billion to the Ministry of Home Affairs, Rs 6.72 billion to the Election Commission, and Rs 1.99 billion to the Ministry of Defense. Research indicates that candidates may spend more than Rs 10 billion within legal limits, though unofficial expenditures could be significantly higher. While election spending is likely to boost sectors such as hospitality, transport, and local commerce in the short term, analysts caution that it may fuel inflation and delay long-term capital investment.
Funding shortfall likely as Gen Z protest damage exceeds Rs 84 billion
The Ministry of Finance has allocated Rs 4.34 billion in the current fiscal year to restore infrastructure damaged during the Gen Z protests. However, a National Planning Commission assessment estimates total physical losses at Rs 84.457 billion, including Rs 44.937 billion in public sector damage. Over the next two fiscal years, the federal government plans to spend Rs 10.18 billion annually on reconstruction. To manage the funding gap, the ministry is seeking support from development partners and the Non-Resident Nepali (NRN) community, while trimming expenditures on smaller projects.
Political parties prioritize energy expansion in manifestos
Major political forces have highlighted energy development as central to national prosperity in their election agendas. The Rastriya Prajatantra Party has proposed designating the coming decade as an Energy Production Decade, targeting 28,500 megawatts by 2035. Similarly, the Ujyalo Nepal Party led by Kulman Ghising aims to generate 12,000 megawatts by 2030 and 40,000 megawatts by 2045. The party has pledged to distribute 1,000 shares of hydropower projects to each household and establish a People’s Hydropower Fund, allocating 20 percent of project earnings to education, healthcare, and employment programs, with the broader goal of achieving carbon neutrality.
Electricity regulator studies actual hydropower project costs
The Electricity Regulatory Commission has initiated research to determine realistic construction and operational expenses for hydropower schemes. The study, led by Chairman Ram Prasad Dhital, covers run-of-river, peaking, and reservoir projects across the Koshi, Gandaki, and Karnali river basins. Data has been requested from 484 private firms to establish a benchmark cost. The initiative aims to standardize Power Purchase Agreement rates and prevent inflated cost claims, some reportedly reaching Rs 450 million per megawatt. The findings are expected to help financial institutions and investors identify viable projects and ensure transparent transfer of ownership to the government after contract completion.
Nepal introduces automatic route for foreign investment approval
The Ministry of Industry, Commerce, and Supplies has amended the Foreign Investment and Technology Transfer Act, 2019, to introduce an automatic approval mechanism. The updated provision removes the maximum investment cap for designated industries. In the information technology sector, the minimum investment requirement has been eliminated altogether. The reform is intended to ease bureaucratic procedures and attract small and medium-sized foreign investors in areas such as innovation, startups, and service industries. Officials expect the change to significantly shorten the time required for foreign companies to establish operations in Nepal.
Aviation fuel services begin at Bharatpur Airport
Nepal Oil Corporation Limited has formally started aircraft refueling operations at Bharatpur Airport. Executive Director Chandika Prasad Bhatta said the service was introduced in response to rising flight frequency and passenger demand. The Corporation has installed two refueling units with a combined daily capacity of 22,000 liters. Previously, aircraft were required to carry additional fuel from Kathmandu, reducing passenger capacity. With six staff members deployed from the Sinamangal office, airlines such as Buddha Air can now operate more efficiently on routes connecting Bharatpur, Kathmandu, and Pokhara.
TIA handles over 750,000 passengers in January
Tribhuvan International Airport recorded 750,183 passengers in January, reflecting continued growth in air travel. According to airport authorities, 2,949 international and 6,809 domestic flights operated during the month. International services carried 431,635 passengers, while domestic flights transported 318,548 travelers. Currently, 29 international and 20 domestic airlines, including helicopter services, operate from the airport. Among domestic carriers, Nepal Airlines Corporation transported 54,358 passengers, followed by Himalaya Airlines with 35,054, while Buddha Air carried 2,834 passengers on its India-bound international routes. The figures indicate steady recovery and expansion in the aviation sector compared to previous years.
Cooperative accused of embezzling Rs 11.21 billion from 21 depositors
The Golden Times Saving and Credit Cooperative in Kamalpokhari has allegedly defrauded 21 depositors of Rs 11.215 billion. Victims have filed eight complaints against members of the board and management. Police have arrested Chairman Rajendra Singh and Treasurer Amrita Bhattarai, and issued warrants for five additional suspects, including Executive Director Mamta Kumari Shivhare. Authorities allege the accused misappropriated public savings before shutting down the office and absconding. Prosecutors are demanding up to seven years of imprisonment and fines of Rs 70,000 for those implicated.
Authorities confiscate 400 kg of substandard glucose
The Department of Food Technology and Quality Control shut down LG Glucose Packaging Industry in Chandragiri after discovering 400 kilograms of low-quality glucose. The company had been operating without official authorization. Inspections at Darbar Cafe and Restaurant and Shiva Shankar Sweet and Chaat also uncovered serious sanitation breaches, including the use of non-edible artificial coloring and ink-printed paper for wrapping food. Spokesperson Dr Balkumari Sharma warned that violations of the Food Safety and Quality Act, 2024, carry penalties of up to Rs 500,000 and five years’ imprisonment. Contaminated products were destroyed and warnings issued.
Mechi Customs collects nearly Rs 10 billion in seven months
The Mechi Customs Office in Jhapa has generated Rs 9.922 billion in revenue during the first seven months of the fiscal year. Information Officer Ishwar Kumar Humagain stated that while the annual target for the period was Rs 10.552 billion, revenue collection surged between mid-January and mid-February. During that month alone, the office collected Rs 1.513 billion, surpassing its target by 102.34 percent. The government aims to raise Rs 18.877 billion from the office by the end of the fiscal year.
Rs 2 billion shortfall threatens Suryabinayak-Dhulikhel road expansion
The 15.8-kilometer Suryabinayak-Dhulikhel road widening project is facing a financial deficit that could delay completion. Project Engineer Bishnu Prasad Khanal said that although Rs 700 million was allocated this fiscal year, an additional Rs 2 billion is required to settle contractor payments and complete blacktopping by July 16, 2025. The Suryabinayak-Sanga stretch is 48 percent complete under a Rs 3.889 billion contract, while the Sanga-Dhulikhel segment has reached 65 percent progress. Although the Ministry of Finance has assured that funding shortages will not halt work, delays in bridge construction remain a concern as designs for two major bridges are still under revision.
Karnali Province utilizes only 16.14 percent of annual budget
By mid-February, the Karnali Province government had spent just 16.14 percent of its Rs 32.996 billion annual allocation. According to Provincial Accounts Controller Ratna Subedi, only Rs 5.324 billion had been utilized, leaving Rs 27.67 billion unspent. Capital expenditure remains particularly low at 9.44 percent, totaling Rs 1.88 billion. Despite directives from Chief Minister Yamlal Kandel, procedural hurdles and disruptions linked to the Gen Z protest have slowed implementation. Administrative spending, however, has reached 27.24 percent. The opposition Nepali Communist Party has criticized the government for ineffective execution of development policies.
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