KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The overall economic picture reflects a mix of cautious financial management, uneven market signals, and structural inefficiencies. Despite higher trading activity, the stock market showed marginal decline, suggesting investor uncertainty, while falling gold and silver prices indicate mild correction rather than strong demand shifts.
The central bank’s move to absorb excess liquidity highlights weak credit uptake in the economy, reinforcing concerns about sluggish private sector expansion. Revenue collection and rising imports—especially through Birgunj—point to continued consumption-driven growth, but also underline a persistent trade imbalance.
Policy efforts such as expanding subsidized loans and reserving market space for farmers aim to improve inclusivity, yet issues like cross-border price disparities and artificial shortages expose market distortions.
Meanwhile, large infrastructure spending plans and ongoing projects signal long-term intent, but delays and cost overruns, as seen in irrigation projects, raise concerns about execution efficiency. Overall, the economy appears stable but constrained by low investment momentum, governance gaps, and reliance on imports.
NEPSE dips slightly despite higher turnover
The Nepal Stock Exchange fell by 2.95 points on Wednesday, closing at 2,804.17, a marginal 0.10% decline. In contrast, the Sensitive Index rose by 0.65 points to 471.22. A total of 17.58 million shares of 342 companies were traded through 121,433 transactions, generating Rs 7.813 billion in turnover. Market performance was mixed, with 121 gainers, 138 losers, and 10 unchanged. While sectors like finance and non-life insurance advanced, the hotel and tourism sector led losses.
Gold and silver prices decline in domestic market
Prices of precious metals fell on Wednesday, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold dropped by Rs 800 per tola to Rs 300,500, while silver declined by Rs 30 to Rs 5,130 per tola, reflecting minor corrections in the domestic market.
NRB moves to absorb Rs 40 billion excess liquidity
The Nepal Rastra Bank has begun withdrawing Rs 40 billion from the banking system to manage surplus liquidity amid weak credit demand. The central bank is using a 160-day deposit collection tool, with “A”, “B”, and “C” class financial institutions participating through an online bidding process. Priority is given to lower interest bids, currently averaging around 3%, with a minimum bid set at Rs 100 million. The collected amount, along with interest, will be repaid on October 7 as part of routine open market operations.
Inland revenue office collects Rs 3.97 billion
The Inland Revenue Office collected Rs 3.976 billion in revenue over nine months, slightly below its Rs 4.338 billion target. Excise duty contributed the largest share, followed by income tax and VAT. Legal action has been initiated against 125 non-compliant firms, with some already settling dues. The office currently oversees over 166,000 taxpayers.
SSF raises home loan ceiling to Rs 15 million
The Social Security Fund has increased its home loan limit to Rs 15 million from the previous Rs 7.5 million, effective April 17. Loans are offered at an interest rate of 5.85% annually, with eligibility based on collateral and repayment capacity. The fund provides loans under four categories, including housing, education, social work, and special contributor loans, aiming to expand financial support for contributors.
Birgunj customs imports reach Rs 694 billion in nine months
Imports through the Birgunj Customs Office totaled Rs 694.05 billion in the first nine months of the fiscal year, marking a 13% increase year-on-year. Petroleum products dominated imports at Rs 148.16 billion, followed by iron and steel, crude soybean oil, and machinery. The customs office collected Rs 177.66 billion in revenue during the same period.
Agriculture ministry reserves market space for farmers
The Ministry of Agriculture and Livestock Development has directed that 10% of stalls in wholesale markets and 50% in local markets be reserved for farmers. The move aims to reduce middlemen and allow direct sales. Farmers’ sheds will be made mandatory in 11 wholesale markets, including the Kalimati Fruit and Vegetable Market, to promote fair pricing and local production.
National Planning Commission proposes Rs 44 billion for roads
The National Planning Commission has recommended Rs 44.336 billion for 13 infrastructure projects. Major allocations include sections of the Postal Highway, the Kaligandaki Corridor, and other strategic road networks. The commission has also proposed funding for a feasibility study of a metro rail system in Kathmandu Valley.
Cross-border shopping drops sharply in Mahottari
Cross-border shopping in Mahottari has declined by around 80% after stricter customs enforcement on goods above Rs 100. Local markets such as Bardibas have seen increased activity, benefiting domestic traders. However, consumers report higher prices and fewer options compared to nearby Indian markets, while authorities continue monitoring illegal trade activities.
Govt to call tenders for Sunkoshi Marin project structures
The government is preparing to invite bids for key civil works of the Sunkoshi Marin Diversion Multipurpose Project, including headworks and a powerhouse. The move follows the termination of a previous contract due to delays. The project aims to irrigate 122,000 hectares in Madhesh Province and generate 31 MW of electricity.
Embankment work accelerates to protect Susta from Narayani River
Construction of a 900-meter embankment in the Susta area of Nawalparasi (Bardaghat Susta Paschim) is moving ahead rapidly to reduce erosion risks from the Narayani River. The Rs 140 million project, overseen by the Irrigation and Water Resources Management Project Office in Chitwan, is being closely monitored to ensure quality and timely completion. Officials have instructed contractors to finish the work before the monsoon, as the embankment is seen as a crucial long-term measure to protect settlements and farmland from recurring river damage.
Babai irrigation project cost doubles amid delays
The cost of the Babai Irrigation Project in Bardiya has surged from Rs 16.43 billion to Rs 33.19 billion due to prolonged delays, design changes, and flood damage. Although work began decades ago, the project remains incomplete, with only Rs 12.28 billion spent so far. Designed to irrigate 36,000 hectares, significant construction—particularly canals—remains unfinished, with completion now targeted for the next fiscal year.
Renewable pellet fuel production begins in Jhapa using local waste
The Parajuli Biomass Briquette Industry has started producing renewable pellet fuel in Mechinagar-15, Jhapa, using locally available waste materials. The plant can produce up to 70,000 kilograms of pellets every 12 hours, offering an eco-friendly substitute for coal and firewood in industries such as tea, cement, and iron. The initiative is expected to promote energy self-reliance by replacing imported fuel with domestic biomass, with plans to expand distribution to other districts and India.
Banke farmers adopt triple-cropping with irrigation expansion
Farmers in Banke have shifted to a three-crop system following improved irrigation access, largely supported by the Sikta Irrigation Project. Previously dependent on monsoon paddy, farmers now grow additional crops like mustard or potatoes and spring maize. Irrigation has reached 24,000 hectares so far, boosting agricultural productivity and reducing reliance on rainfall.
Banana prices surge amid artificial shortage
Banana prices have spiked sharply due to alleged market manipulation following a ban on imports from India. According to the Nepal Banana Producers Federation, traders have created artificial shortages, pushing prices up to Rs 300–400 per dozen, while farmers receive significantly lower rates. The federation has urged authorities to intervene and control black marketing.
Makwanpur local unit launches taxpayer service center
Manahari Rural Municipality has launched a local taxpayer service center to ease access to tax-related services. Residents can now obtain and manage Permanent Account Numbers (PAN) and complete tax registration locally, reducing the need to travel to Hetauda. The move supports decentralization and improves service delivery for local businesses.
Sarbottam Paints to issue IPO for migrant workers
Sarbottam Paints Industries is set to launch an initial public offering (IPO) targeting Nepali migrant workers from May 4. The company will issue 850,000 shares, with an initial tranche allocated to overseas workers. Investors can apply for shares priced at Rs 100, with Global IME Capital appointed as the issue manager.
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