KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s recent economic indicators reflect a mixed macro-financial environment marked by liquidity management, external imbalances, and sector-specific volatility. The Nepal Rastra Bank’s Rs 100 billion liquidity absorption signals continued excess liquidity in the banking system, even as capital markets weakened with the NEPSE index declining despite higher turnover, suggesting profit-taking and selective sectoral gains in hydropower and microfinance stocks.
At the external front, trade fundamentals remain structurally weak, with imports rising faster than exports and pushing the trade deficit to Rs 1.443 trillion, underscoring persistent dependency on foreign goods despite modest export growth. Parallel customs data highlight strong revenue generation from electric vehicle imports, reinforcing import-driven fiscal inflows.
Fiscal and planning indicators show expansion in the National Project Bank and ongoing infrastructure acceleration, yet implementation challenges persist, as seen in delayed contractor payments, stalled road projects, and policy disruptions in transport registration. Real sector pressures are evident in declining industrial capacity utilization in Gandaki Province, reduced agricultural output, and falling tourism arrivals.
Meanwhile, regulatory and environmental interventions, such as the Kaski extraction ban, and institutional adjustments, including FNCCI leadership changes and IPO activity, reflect efforts to manage governance, investment flows, and market confidence within a broadly uneven but active economic landscape.
NEPSE index falls 16.38 points despite higher turnover
The Nepal Stock Exchange (NEPSE) index declined by 16.38 points on the final trading day of the week, even though trading activity increased. A total of 10,847,000 shares from 336 listed companies changed hands, producing a turnover of Rs 4.482 billion. First Microfinance Laghubitta led the gainers with a 14.81 percent rise, followed by Mabilung Energy up 9.35 percent. Bungal Hydro and Ankhukhola Hydropower also posted gains of 7.24 percent and 7.20 percent respectively.
Nepal’s trade deficit rises 15 percent to Rs 1.44 trillion as imports surge
Data from the Department of Customs show that Nepal’s total foreign trade reached Rs 1.941 trillion in the first ten months of fiscal year 2025/26, a 14.75 percent increase. However, the trade deficit widened by 14.92 percent to Rs 1.443 trillion as imports grew faster than exports. Imports rose 14.82 percent to Rs 1.692 trillion, while exports increased 14.25 percent to Rs 248.96 billion. Imports accounted for 87.18 percent of total trade, leaving exports with 12.82 percent, and pushing the import-export ratio to 6.80.
NRB mops up Rs 100 billion liquidity through 61-day instruments
The Nepal Rastra Bank (NRB) conducted an open market operation on Friday, absorbing Rs 100 billion from the banking system. The central bank used its deposit collection instrument with a 61-day maturity to drain excess liquidity. Commercial banks and financial institutions submitted competitive bids through an online auction platform before the 3:00 PM deadline. Settlement records show that both principal and interest will be returned to participating institutions on July 22. Subscription amounts were set with a minimum of Rs 100 million and increments in multiples of Rs 50 million.
Gold slips slightly while silver gains in local market
Gold prices declined marginally in the domestic market today, while silver prices increased. According to the Federation of Nepal Gold and Silver Dealers’ Association, fine gold fell by Rs 100 per tola to Rs 293,700. Silver, on the other hand, rose by Rs 65 per tola to Rs 5,115. The movement follows a minor adjustment in trading compared to the previous day’s rates.
Finance ministry reports 4,391 projects in national project bank
Swarnim Wagle, Finance Minister, presented an economic update to the Development, Economic Affairs and Good Governance Committee of the National Assembly. Records show that the Ministry of Finance’s National Project Bank now includes 4,391 projects after 390 new additions. Of these, 3,909 sub-projects are under feasibility review, while 92 are active multi-year projects. The minister cited stable macroeconomic indicators, including rising hydropower output, improved tourism inflows, strong banking liquidity, and comfortable foreign exchange reserves.
Customs bureau records Rs 1.941 trillion in external trade over 10 months
The Department of Customs confirmed that Nepal’s external trade stood at Rs 1.941 trillion during the first 10 months of fiscal year 2025/26 (July 17, 2025 to May 14, 2026). Imports totaled Rs 1.692 trillion, while exports reached Rs 248.96 billion. The trade imbalance widened by 14.92 percent to Rs 1.443 trillion, with imports making up over 87 percent of total trade activity.
Electric vehicle imports generate Rs 12.43 billion in customs revenue
The Department of Customs reported that Nepal imported 8,607 fully built electric vehicles in the first 10 months of fiscal year 2025/26, ending May 14, 2026. The total value of these imports reached Rs 20.325 billion, generating Rs 12.433 billion in customs revenue. Imports included vehicles across multiple power categories, with the largest share in the 51–100 kW segment. Three-wheeler electric vehicles also recorded significant volumes, with thousands of both assembled units and kits entering the country.
Foreign ministry seeks delay in least developed country graduation
The Ministry of Foreign Affairs has formally requested the United Nations Committee for Development Policy to postpone Nepal’s graduation from least developed country status by three years. Foreign Minister Shisir Khanal sent the request on May 13, 2026, seeking to extend the transition period from November 24, 2026, to November 2029. The government cited global economic shocks, weak GDP growth projections of 2.3 percent, potential job losses after loss of preferential access, delayed transition planning, and declining remittance inflows.
MCA-Nepal accelerates cross-border transmission line construction in Nawalparasi
MCA-Nepal has sped up construction of the 18-kilometer cross-border transmission line under the Millennium Challenge Corporation compact in Nawalparasi (Bardaghat Susta Paschim). Out of 53 planned towers, 22 have been erected and 24 foundations completed. Compensation for tower land is fully distributed, while right-of-way payments have reached 70 percent completion. Officials confirmed that the project will connect Nepal’s grid to the New Butwal–Gorakhpur line within about 21 months.
Infrastructure committee directs government to clear contractor arrears
The House of Representatives Infrastructure Development Committee (IDC) urged the government to resolve delayed payments to construction contractors. Chair Ashish Gajurel emphasized clearing dues to avoid project disruptions, while lawmakers raised concerns over infrastructure delays and cost pressures. Officials from the infrastructure ministry acknowledged the issues and indicated policy adjustments, while the Federation of Contractors’ Associations of Nepal called for procurement adjustments due to rising global costs.
NRB survey shows industrial output in Gandaki falls to 39 percent
A half-year economic survey by the Nepal Rastra Bank found that industrial capacity utilization in Gandaki Province declined to 39.56 percent as of January 14, 2026, down from 41.40 percent a year earlier. Manufacturing performance was mixed, with gains in mustard oil and pharmaceuticals but declines in milk processing and cigarettes. The province’s GDP is projected at 5.01 percent growth, with services dominating at 55.35 percent. Agricultural land use fell by 6.87 percent, reducing output, while credit to agriculture and industry remained steady. Tourist arrivals also dropped sharply by 33.2 percent.
Kaski imposes 3-month ban on riverine and mineral extraction
The District Riverine and Mineral Product Monitoring Committee of Kaski District has enforced a three-month complete ban on riverbed and mineral aggregate extraction across the district. Committee Coordinator and District Coordination Committee Chief Liladhar Paudel confirmed that all mining, collection, and transport activities will remain suspended from June 15 to September 16. District Coordination Officer Navaraj Baral stated that enforcement teams will carry out monitoring under existing environmental regulations, with restricted operating hours of 8:00 AM to 6:00 PM before the ban takes effect. The measure is aimed at protecting the Phewa Lake watershed, reducing tax leakage, and managing enforcement against unauthorized extraction activities.
Kowang–Jomsom road contract terminated after prolonged delay
The Beni-Jomsom-Korala Road Project Office has terminated a Rs 700 million contract for the 17-kilometer Kowang–Jomsom road segment after years of delay. Project Chief Tejaswi Sharma confirmed that the joint venture contractor, Pappu-Gauri Parvati Koshi & Neupane, failed to complete asphalt works despite seven extensions. The deadline expired 200 days ago, leaving around 15 percent of the project unfinished, including key sections near Thasang Rural Municipality, Marpha Rajkhola Bridge, and Puthang Airport. Authorities have invoked provisions of the Public Procurement Act, 2007, imposed penalties, and initiated procedures for re-tendering the remaining work.
Transport body criticizes halt on vehicle registration
The Nepal Chamber of Commerce has objected to the sudden suspension of new public transport vehicle registrations, including electric vehicles, by the Department of Transport Management. The chamber warned that the abrupt decision exposes dealers to financial losses, especially those who have already financed imports through bank loans and Letters of Credit. It also noted that vehicles are currently stuck at customs, in transit, or at manufacturing stages. The chamber urged authorities to allow clearance for already approved imports, citing concerns over investor confidence and disruption to public transport expansion.
Kalanga Hydro opens public share issue
Kalanga Hydro Company has launched the public subscription phase of its initial public offering (IPO). The offering is the final tranche of a Rs 490 million capital raising plan, representing 35 percent of the company’s issued capital of Rs 1.40 billion. Earlier allocations included shares for project-affected locals, migrant workers, mutual funds, and employees. A total of 2,870,000 shares are now available to the general public at a face value of Rs 100 each, with applications open through the C-ASBA system and MeroShare until May 27.
FNCCI elects new senior vice president
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) elected Sur Krishna Vaidya as senior vice president following an internal vote. He secured 56 votes against Ram Chandra Sanghai’s 30. In a separate election, Manish Lal Pradhan was elected treasurer with 61 votes, defeating Ambika Poudel. The new leadership is expected to focus on policy advocacy, improving access to credit for the business sector, and strengthening coordination between private industry and government institutions.
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