KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic and infrastructure developments reflect a mix of fiscal activity, market fluctuations, and strategic policy planning amid ongoing challenges. Gold and silver prices have fallen sharply, mirroring global market volatility, while the Finance Ministry has resumed Rs 52.9 billion in funding for stalled development projects, signaling renewed government investment.
The NRB’s five-stage plan for capital account liberalization highlights a long-term strategy to attract foreign investment and move toward a more flexible exchange rate, contingent on fiscal discipline and low inflation.
Meanwhile, insurance claims from the September 2025 Gen Z protests have surged past Rs 23 billion, reflecting both the scale of civil unrest and financial exposure. Labor permits for Nepali workers in seven Middle Eastern countries have resumed, though restrictions persist in conflict-affected nations.
Fiscal governance is being strengthened with borrowing caps and Rs 151.7 billion in equalization grants, while sectors such as tourism, poultry, and small industries show mixed growth amid market and price pressures, including reduced spring paddy cultivation in Jhapa and chick price recovery.
Infrastructure development is progressing unevenly: some roads and bridges, such as the Dhangadhi-Dipayal fast track and Khotang blacktopping project, have advanced, whereas construction delays and land disputes continue to stall strategic projects like the Nagma-Gamgadhi bridges and Dhulabari market roads.
Collectively, these updates illustrate the interplay of policy measures, market dynamics, and infrastructure challenges shaping Nepal’s current economic landscape.
Gold prices decline in domestic market
Gold prices fell sharply in the Nepali market, dropping by Rs 7,800 per tola, while silver prices have also declined, reflecting fluctuations in international markets.
Finance Ministry releases Rs 52 billion for stalled projects
The Ministry of Finance has resumed funding for 2,042 development projects by releasing Rs 52.9 billion. These projects were previously halted due to low priority or inadequate preparation. The move targets ongoing and tender-stage projects, while the ministry has also set a budget ceiling of Rs 18.9 billion for the next fiscal year. Additionally, Rs 122 billion has been collected for the Budhigandaki Hydropower Project, with Rs 45 billion already utilized.
NRB proposes phased plan for capital account liberalization
A new report by Nepal Rastra Bank outlines a five-stage roadmap toward capital account convertibility, building on full current account convertibility achieved in 1993/94. The plan prioritizes foreign direct investment in its initial phase, followed by opening share markets and government bonds to non-residents, and eventually moving toward a more flexible exchange rate regime beyond the current peg with the Indian rupee. The central bank has stressed the need for strong fiscal discipline and low inflation to ensure a smooth transition.
Insurance claims from Gen Z protests cross Rs 23 billion
Insurance claims linked to damages from the Gen Z protests in September 2025 have reached Rs 23.38 billion, the highest in Nepal’s history. Around 30 percent of the claims have been settled so far, with motor insurance accounting for the majority. Authorities said remaining large claims are pending technical assessments.
Outgoing Finance Minister enters cooling-off period
Outgoing Finance Minister Rameshore Khanal has begun a mandatory cooling-off period from Friday, formally ending his involvement in ministry affairs. In a public statement, he urged the media and public to avoid speculation regarding his role in future fiscal decisions, marking a transition phase until a new finance minister is appointed.
Labor permits resume for seven Middle Eastern countries
The government has resumed labor permit renewals for Nepali workers in seven Middle Eastern countries, including Saudi Arabia, Qatar, and the UAE, following easing regional tensions. However, restrictions remain in conflict-affected nations such as Iran and Israel, while authorities continue monitoring the situation.
Commission sets borrowing limits for all government tiers
The National Natural Resources and Fiscal Commission has proposed borrowing caps for the fiscal year 2026/27, limiting federal borrowing to 5.5 percent of GDP. Provincial and local governments will be allowed to borrow up to 12 percent of their total revenue, subject to federal approval, with an emphasis on investing in high-return and employment-generating projects.
Commission recommends Rs 151 billion in equalization grants
The commission has proposed Rs 151.7 billion in fiscal equalization grants for provinces and local levels. The allocation includes Rs 61.05 billion for provinces and Rs 90.2 billion for local governments, aiming to bridge resource gaps and ensure minimum funding levels for lower-income municipalities.
Tourist arrivals rise in national park
Visitor numbers to the national park and surrounding forests have increased by over 12,000 in the first 11 months of the fiscal year, reaching 168,695. Revenue collection has also grown significantly, driven mainly by ecotourism activities.
Poultry sector generates over Rs 60 billion annually
A new survey shows Nepal’s commercial poultry sector generates nearly Rs 61 billion annually from meat production, with operations spanning most districts. However, low registration and insurance coverage remain concerns.
Over 700 small industries registered by mid-March
A total of 717 new small and cottage industries have been registered by mid-March this fiscal year, alongside the renewal of 1,262 firms. While official closures remain limited, authorities noted that many businesses may have informally shut down due to economic pressures.
Low prices dampen spring paddy cultivation in Jhapa
Farmers in Jhapa are reducing spring paddy cultivation due to low market returns despite government-set support prices. A decline of up to 4,000 hectares in cultivated area is expected this season.
Humla seeks additional supply of subsidized salt
Authorities in Humla have requested an additional 1,500 quintals of iodized salt to address shortages for the remaining fiscal year, citing high demand and limited supply.
Chick prices recover after prolonged slump
Prices of hatchery chicks have rebounded to cover production costs after more than two years, offering relief to farmers hit by earlier market downturns and illegal imports.
Community forest begins organic fertilizer production
A community forest group in Nawalpur has started producing organic fertilizer using forest waste, aiming to reduce fire risks and provide affordable manure to farmers while creating local employment.
Department fines two firms for consumer law violations
The Department of Commerce has fined two firms in Kathmandu and Bhaktapur for violating consumer protection laws, while issuing warnings to 11 others as part of ongoing market monitoring efforts.
Land offices resume services after protest damage
All land and survey offices damaged during the 2025 protests have resumed operations, with digital systems helping restore records and ensure continuity of services.
Dhangadhi transport office collects over Rs 481 million
The Transport Management Office in Dhangadhi has collected Rs 481.9 million in revenue so far this fiscal year, mainly from vehicle taxes and licensing services.
Road construction delays hit Dhulabari businesses
Delays in road construction in Mechinagar have disrupted local businesses, with traders reporting closures due to dust, poor drainage, and pending payments.
Two bridges completed on Dhangadhi-Dipayal route
Two concrete bridges have been completed under the Dhangadhi-Dipayal fast track project, improving regional connectivity in the far-west.
Blacktopping begins on key Khotang road
Work has started on blacktopping a major road project in Khotang, expected to improve connectivity and reduce travel time upon completion.
Bridge construction stalled on Nagma-Gamgadhi road
Four bridges along the Nagma-Gamgadhi road remain incomplete due to land compensation disputes, delaying progress on a key route to Rara Lake.
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