KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic indicators point to a mixed and somewhat fragile outlook, marked by active markets but underlying structural pressures. While NEPSE’s decline despite strong turnover suggests cautious investor sentiment and sector-wide weakness, the sharp rise in gold prices reflects heightened risk aversion and global uncertainty.
Public debt continues to climb, with heavy reliance on domestic borrowing compensating for weak external loan inflows, raising concerns about future credit crowding and fiscal sustainability. Excess liquidity in banks has prompted aggressive intervention by Nepal Rastra Bank, even as financial institutions tighten costs amid subdued private-sector lending.
Meanwhile, strong outmigration for foreign employment underscores limited domestic job creation, while shifting labor policies in key destinations such as Saudi Arabia pose risks to remittance inflows. Agricultural output remains vulnerable to climate shocks and governance gaps, as seen in declining paddy yields and abandoned subsidized farms, highlighting persistent challenges in productivity, accountability, and long-term economic resilience.
NEPSE slips 9 points despite Rs 8.92 billion turnover
The Nepal Stock Exchange (NEPSE) index retreated by 9.43 points on Wednesday to settle at 2,705.38. Trading activity remained relatively strong, with shares worth Rs 8.92 billion exchanged through transactions of 21.6 million units. Sector-wise, only the “Others” group posted a modest gain of 0.26 percent, while all remaining sectors closed lower. The Hotel and Tourism index led losses, declining by 1.88 percent. Kalika Power Company Limited emerged as the top gainer with a jump of 9.84 percent, whereas Ankhu Khola Hydropower recorded the highest turnover at Rs 433.6 million.
Gold price jumps by Rs 10,400 per tola
Gold prices surged sharply in the domestic market on Wednesday. The Federation of Nepal Gold and Silver Dealers’ Association reported that gold rose by Rs 10,400 per tola to reach Rs 295,100. On Tuesday, the precious metal had been trading at Rs 284,700 per tola. Silver prices also increased, climbing by Rs 40 per tola to Rs 5,920 from the previous day’s Rs 5,880. The surge reflects continued volatility in global bullion markets and strong safe-haven demand.
Nepal’s public debt climbs to Rs 2.806 trillion
Nepal’s total public debt reached Rs 2.806 trillion as of January 15, according to the Public Debt Management Office. This represents an increase of Rs 132.34 billion since the beginning of the current fiscal year. External borrowings account for 53 percent of total debt, amounting to Rs 1.487 trillion, while domestic debt stands at Rs 1.319 trillion, or 47 percent. Overall public debt now equals 45.95 percent of the country’s gross domestic product. In the first half of the fiscal year, the government spent Rs 187.12 billion on debt servicing, covering nearly 46 percent of the annual repayment allocation.
NRB absorbs Rs 20 billion to manage excess liquidity
Nepal Rastra Bank (NRB) withdrew Rs 20 billion from the banking system on Wednesday as part of its liquidity management efforts. The central bank used a 63-day deposit collection instrument to absorb surplus funds. This follows a series of bond issuances over the past two weeks that collectively pulled Rs 200 billion from the market. Commercial banks and financial institutions from Class A, B, and C categories participated in the online bidding process, which closed at 2 pm. The NRB has increasingly relied on such tools to regulate excess liquidity caused by weak private-sector credit demand.
Finance Ministry releases Rs 19.21 billion for election expenses
The Ministry of Finance has disbursed Rs 19.21 billion to support preparations for the March 5 parliamentary elections. Of the total amount, Rs 10.39 billion has been allocated to the Ministry of Home Affairs, Rs 6.72 billion to the Election Commission, and Rs 1.99 billion to the Ministry of Defence. The government plans to deploy more than 188,000 security personnel nationwide, including around 147,000 temporary election police. Although the Election Commission had estimated total election costs at Rs 27 billion, the released funds are expected to cover immediate requirements related to security, logistics, and administrative arrangements.
Over 31,700 Nepalis leave for foreign jobs in a month
A total of 31,750 Nepali workers departed for foreign employment between December 16, 2025, and January 15, marking an increase of 2,132 workers compared to the previous month. Data from the Department of Foreign Employment show that the outbound workforce included 27,530 men and 4,220 women. Saudi Arabia remained the top destination with 7,222 workers, followed by Qatar with 4,523 and Malaysia with 3,587. The department noted that labor migration is gradually normalizing after disruptions caused by the Gen Z protests in early September 2025. During the same period, 30,809 workers renewed labor permits to work across 90 countries.
Banks trim operating expenses to Rs 16.56 billion
Commercial and development banks collectively spent Rs 16.56 billion on office operations during the first five months of the fiscal year, reflecting a marginal decline of 0.87 percent compared to the same period last year. The reduction follows Nepal Rastra Bank’s push for branch consolidation and cost efficiency. Global IME Bank recorded the highest operating expenses at Rs 1.31 billion, followed by Nepal Investment Mega Bank at Rs 1.2 billion. NIC Asia Bank reported the sharpest cost reduction, cutting expenses by nearly 23 percent. Meanwhile, development banks saw a rise in operating costs, led by Muktinath Bikas Bank, whose expenses increased by 6.43 percent to Rs 1.92 billion.
External borrowing reaches only 15.7 percent of target
The government has achieved just 15.79 percent of its annual external borrowing target in the first six months of fiscal year 2025/26. According to the Public Debt Management Office, Nepal received Rs 36.89 billion in foreign loans against a yearly target of Rs 233 billion. The shortfall has been attributed to delays in major infrastructure projects and weak project execution. To compensate, the government increased domestic borrowing, raising Rs 177 billion internally. While ample liquidity has kept domestic interest rates low, economists caution that heavy reliance on internal borrowing could crowd out private-sector credit if conditions tighten later in the year.
Government proposes new five-year labor pact with Israel
The Ministry of Labour, Employment, and Social Security has forwarded a draft proposal to Israel seeking a new five-year labor agreement covering agriculture and caregiving jobs. Following a cabinet decision, the government plans to send Nepali workers under a “Learn and Earn” farming program, as well as long-term caregivers for elderly care. The proposal is significant given that around 5,000 Nepalis are currently employed in Israel. Agricultural internships had been suspended after ten Nepali students were killed during a conflict in 2023. The new agreement aims to strengthen safety measures and expand formal employment channels.
Saudization policy threatens jobs of Nepali professionals
Saudi Arabia has stepped up enforcement of its Saudization policy, requiring private companies to fill 30 to 46 percent of engineering and technical positions with Saudi nationals within six months. The policy has put thousands of migrant workers, including Nepali engineers and administrative staff, at risk as firms increasingly decline to renew foreign workers’ visas. Several administrative, healthcare, and technical roles have already been fully reserved for Saudi citizens. Labor experts warn that as local skill levels improve, job opportunities for foreign workers may shrink, potentially affecting the annual flow of more than 100,000 Nepalis seeking employment in the kingdom.
Lumbini produces 1.3 million metric tons of paddy
Lumbini Province recorded paddy production of around 1.3 million metric tons across its 12 districts in fiscal year 2025/26, according to the Directorate of Agriculture Development. Paddy cultivation covered nearly 299,588 hectares. Despite the sizeable output, overall production declined from the previous year due to early-season droughts followed by unseasonal rainfall, which caused crop losses estimated at Rs 135 million. Kapilvastu ranked as the top-producing district with 305,760 metric tons, followed by Rupandehi with 290,292 metric tons. Rukum Purba recorded the lowest output at just 1,193 metric tons, largely due to limited cultivable land.
Subsidized agriculture farms in Mugu fall into disrepair
Several agriculture farms established in Mugu with provincial and federal subsidies have been abandoned within a year of receiving funding, according to the district Agriculture Development Office. Projects in Khatyad and Soru rural municipalities, as well as Chhayanath Rara Municipality, are now overgrown with weeds. Local residents and civil society representatives have accused authorities of distributing grants to politically connected “fake farmers” rather than genuine producers. Although infrastructure such as cellar stores was built, many facilities are being used as living spaces instead of for agricultural purposes. Officials cited poor monitoring and damage from floods and landslides as contributing factors.
Authorities fine and warn 31 firms over consumer violations
The Department of Commerce, Supplies, and Consumer Protection took action against 31 business establishments during market inspections on Tuesday. Khilung Kalika Marketing in Suryabinayak-2 was fined Rs 50,000 for breaching provisions of the Consumer Protection Act, 2018. The department also ordered Hellos Mart, One Store Mobile, and Abhas Trading Company to submit relevant documents within three days. Additionally, 27 other businesses, including Mali Oil Store, Butcher Nepal, and several poultry farms, were issued warnings and instructed to address operational shortcomings and comply with quality standards.
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