KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic snapshot reflects a mixed and somewhat cautious outlook, where financial system liquidity remains high but real-sector momentum appears uneven. The slight uptick in the NEPSE alongside declining gold and silver prices suggests subdued investor confidence and a lack of strong alternative investment pull, while the Nepal Rastra Bank’s aggressive liquidity mop-up and plans to expand deprived sector lending signal attempts to stimulate credit demand and redirect idle funds into productive sectors.
At the same time, policy interventions—from LPG supply adjustments by Nepal Oil Corporation to stricter transport, customs, and food quality regulations—indicate active state management of supply chains and market discipline. However, structural weaknesses persist: slow capital spending at the local level, industrial disruptions like the Hetauda Cement shutdown, and declining agricultural patterns point to underlying inefficiencies in production and public investment execution.
While sectors such as insurance, imports, and tourism-linked homestays show growth, private sector concerns over policy stability and localized economic disruptions (e.g., Birgunj) highlight fragility in business confidence. Overall, the economy appears stable but constrained—characterized by excess liquidity, uneven sectoral performance, and a continued reliance on policy-driven corrections rather than broad-based demand recovery.
NEPSE ends week with slight gain, turnover at Rs 5.27 billion
The Nepal Stock Exchange (NEPSE) recorded a modest increase of 1.54 points, or 0.05 percent, closing at 2,788.70 on Friday, ending a four-day downward trend. The Sensitive Index declined slightly by 0.04 percent to 468.07, while broader indicators showed mixed performance. A total of 11.27 million shares from 351 companies were traded through 75,229 transactions, generating a turnover of Rs 5.27 billion. Of the listed companies, 87 saw gains, 168 declined, and 14 remained unchanged. Sector-wise, manufacturing, trading, and hydropower led the gains, while finance, microfinance, and life insurance sectors were among the major losers.
Gold and silver prices decline
Gold prices fell on Friday, decreasing by Rs 2,200 per tola to Rs 296,500, according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver prices also dropped by Rs 75 per tola to Rs 4,945. The decline follows a slight fluctuation in the previous trading day, when both metals were priced higher.
NRB mops up Rs 120 billion excess liquidity today
The Nepal Rastra Bank (NRB) withdrew Rs 120 billion from the banking system today in an effort to manage surplus liquidity. The central bank conducted a deposit collection bidding session at 3:00 PM, allowing Class ‘A’, ‘B’, and ‘C’ financial institutions to participate with bids starting from a minimum of Rs 100 million. The NRB accepted multiple interest rate bids for the 19-day instrument, with repayment of principal and interest scheduled for May 13. The move was prompted by a large amount of idle investable funds in the banking sector.
NRB plans to broaden deprived sector lending to include startups
The Nepal Rastra Bank is preparing to widen the scope of deprived sector lending while maintaining the mandatory 5 percent investment requirement for banks and financial institutions. The new framework is expected to include startups and collateral-free loans up to Rs 2.5 million within the deprived sector category. The move comes as credit demand weakens and the existing portfolio shrinks by 6.8 percent in the first eight months of FY 2025/26, falling from Rs 296 billion to Rs 276 billion. The policy aims to promote financial inclusion, encourage entrepreneurship, and diversify lending opportunities for banks.
Nepal Oil Corporation to resume full LPG cylinder sales for 15–20 days
The Nepal Oil Corporation (NOC) has decided to restart full-cylinder LPG sales for a limited period next week to clear excess stock. Earlier, sales had been restricted to half cylinders due to supply disruptions caused by geopolitical tensions in West Asia. However, with LPG imports falling by 24.2 percent in April and more than 10,000 metric tons of gas accumulating at plants—along with 250 bullet trucks stuck at customs—the corporation is temporarily easing restrictions. The policy is expected to remain in effect for 15 to 20 days to reduce inventory pressure and lower costs for industrial users.
Agriculture Minister assures adequate fertilizer for summer rice season
Minister of Agriculture and Livestock Development Gita Chaudhary has assured the National Assembly that sufficient chemical fertilizer will be available for the upcoming summer rice plantation season. She said the government has already secured necessary stocks for immediate demand and is working on additional procurement for later requirements. The ministry’s reform agenda includes improving soil health through Soil Health Cards and encouraging organic and biological fertilizers. Efforts are also underway to refine subsidy distribution so it reaches genuine farmers, alongside ensuring quality seed supply.
Transport Department tightens enforcement of freight weight limits
The Department of Transport Management has issued a directive enforcing strict compliance with freight vehicle weight limits to protect road infrastructure. Under existing guidelines, rigid trucks are limited to 35 tons and trailers to 55 tons, with specific caps for multi-axle vehicles. Cargo vehicles must undergo mandatory weighing at both origin and destination points, and violations will result in fines, vehicle seizure, and legal action. While transport operators support the initiative, they noted that similar measures have been announced multiple times in recent years with limited enforcement success.
Private sector urges government to ensure investment-friendly environment
Three leading private sector bodies—the FNCCI, CNI, and Nepal Chamber of Commerce—issued a joint statement urging the government to maintain a stable and investor-friendly environment. They warned that any discouraging signals toward investors could negatively affect employment, revenue generation, and supply chains. The organizations stressed that weakening the private sector could also strain the banking system and overall economic stability. They called on the government to promote confidence among investors and ensure sustained business growth.
Stricter customs checks boost local trade in Dhangadhi
Increased enforcement of customs duties on goods valued above Rs 100 has strengthened domestic trade in Dhangadhi. Previously, many Nepali shoppers frequently crossed into Indian markets, but rising import duties have reduced this trend by narrowing price differences. Under the Customs Act 2024, duties are collected at different levels depending on value thresholds. Despite stricter controls, smuggling remains an issue, with goods worth Rs 1.2 million seized in the past six days. While local businesses have benefited, concerns persist about rising prices affecting low-income consumers.
Road expansion demolition halts business activity in Birgunj
Economic activity in Birgunj has slowed sharply following the demolition of structures for a road widening project. Since April 19, authorities have removed buildings within 25 meters of the road center along the Gandak Chowk–Miteri Bridge section, following a Supreme Court ruling that cleared legal obstacles. The demolition has led to power and water disruptions, further affecting already weakened businesses. While traders acknowledge the need for infrastructure development, they have expressed concern over the lack of a clear reconstruction timeline and its potential long-term impact on investment and commerce.
Department fines five firms Rs 1.4 million near airport area
The Department of Commerce, Supplies and Consumer Protection carried out a surprise inspection at Tribhuvan International Airport and fined five businesses a total of Rs 1.4 million. Sun Enterprises, Oriental Hotels, T3 Thakali Group, and Sai Kiran Enterprises were each fined Rs 300,000 for violations of the Consumer Protection Act, 2018, including overpricing, double MRP labeling, and selling expired or unsafe products. Hotel Soniga was fined Rs 205,000, while Soaltee Hotel has been asked to submit clarification and relevant documents within 24 hours.
Truck imports surge while bus imports decline at Belhiya border
Imports of trucks and mini-trucks through the Belhiya border increased sharply by 136.27 percent in the first nine months of FY 2025/26, with 613 units imported compared to 324 last year, generating Rs 733.8 million in revenue. In contrast, bus and mini-bus imports fell to 212 units from 316, resulting in a 32.88 percent drop in revenue. Motorcycle imports also rose significantly to 133,971 units. The trend is linked to growing demand for electric vehicles on short routes and higher costs of Euro VI diesel buses.
Syangja spends 77% of federal and 33% of provincial budget
In the first nine months of FY 2025/26 (July 17, 2025 to April 13, 2026), Syangja district utilized 77.26% of its federal budget and 32.75% of its provincial allocation. Out of a total federal budget of Rs 7.842 billion, Rs 6.09 billion has been spent. From the provincial allocation of Rs 2.624 billion, only Rs 859.4 million has been used so far. Capital expenditure remains relatively weak, particularly in infrastructure, water supply, and irrigation projects, with provincial capital spending standing at just 26.84%. Officials said the lower figures reflect delayed payments, as many expenditures are only released after completion of project milestones.
Labor assistance desk at airport operates 24 hours
The Ministry of Labor, Employment and Social Security has expanded the Labor Assistance Desk at Tribhuvan International Airport to round-the-clock service across three shifts. Previously operating in two shifts, the desk is now staffed by 11 employees to support both departing and returning migrant workers. It provides information on legal procedures, embassy contacts, and safeguards against fraud. The initiative is being implemented in coordination with the Department of Foreign Employment, the Foreign Employment Board, and the National Network for Safe Migration.
Public buses to Nuwakot and Dhading shifted to new bus park
Public transport services operating between Kathmandu and Dhading, Nuwakot, and Rasuwa have begun operating exclusively from the New Bus Park in Gongabu. The Kathmandu Metropolitan City implemented the decision to remove roadside bus counters and parking from areas like Machhapokhari and Balaju to ease traffic congestion. Although most long-distance buses already operated from the facility, these routes had resisted the relocation until now. Authorities expect the move to reduce Ring Road traffic significantly, with dedicated facilities arranged inside the bus park.
Government enforces strict quality standards for ‘gundruk’
The Ministry of Agriculture and Livestock Development has introduced mandatory hygiene and quality standards for gundruk, a traditional fermented Nepali food. Under the Food Hygiene and Quality Act, 2024, the use of metal containers such as iron, aluminum, copper, or brass during fermentation is prohibited. The standards require gundruk to be free from contaminants such as mold, insects, stones, hair, and plastic. It must also meet strict chemical limits, including moisture below 12% and zero E. coli presence. Packaging and labeling requirements now include food-grade materials and clear identification of the type of greens used.
Decline in early spring paddy cultivation in Lumbini
Early spring paddy farming in Lumbini Province is declining as farmers shift toward more profitable cash crops. According to provincial agriculture data, the cultivation area has decreased from 3,038 hectares to 2,677 hectares in a year. Significant reductions were recorded in Bardiya and Kapilvastu districts. Farmers are increasingly moving toward sugarcane and maize due to lower input costs and higher returns. Despite the decline in cultivated area, total rice output in FY 2024/25 reached 1.3 million metric tons across 298,622 hectares, with average productivity of 4.52 tons per hectare.
Over 1,000 citizens receive border passes for Kimathanka crossing
Since the reopening of the Kimathanka border point in May 2024, the Sankhuwasabha District Administration Office has issued 1,338 border passes to local residents. In FY 2024/25 alone, 1,082 passes were issued, followed by 256 more in the current fiscal year, along with 648 renewals. The passes allow residents of Bhotkhola and Makalu to access Chinese markets for trade and employment. The border had been closed since early 2020 due to the pandemic. Although road construction is ongoing, the journey from the nearest roadhead still requires a two-day trek.
Hetauda Cement Industry shuts down due to raw material shortage
The Hetauda Cement Industry has suspended operations after facing a severe shortage of raw materials. Despite a daily production capacity of 16,000 bags, the factory has been unable to secure adequate coal and stone supplies. Contractors reportedly failed to deliver materials due to financial constraints. Currently, the plant is only processing 5,000 tons of previously produced clinker. The industry, established in 1977, is also struggling with unpaid wages for over 300 staff members, some of whom have not been paid for nearly 10 months.
Rs 4.5 million grant supports 18 homestays in Baglung
The Sustainable Tourism Promotion Project has provided Rs 4.5 million in grants to develop 18 homestays in Baglung’s Nisikhola and Dhorpatan areas. Under the program, selected households received Rs 250,000 each to improve infrastructure and services. The initiative aims to promote local tourism, support women’s empowerment, and encourage youth entrepreneurship. Plans are underway to expand homestay networks further, with additional properties expected to be developed in both regions.
Six non-life insurers cross Rs 3 billion premium mark
The non-life insurance sector has seen strong growth, with six companies surpassing Rs 3 billion in premiums by mid-April. Shikhar Insurance leads with Rs 4.80 billion, followed by Sagarmatha Lumbini and Himalayan Everest Insurance. Overall, 14 insurers collected Rs 36.28 billion in premiums during the first nine months of FY 2025/26, marking a 13.86% increase year-on-year. More than 2.2 million insurance policies were issued during this period.
Taksar Pikhuwa Khola Hydropower to launch IPO from May 6
Taksar Pikhuwa Khola Hydropower Company is set to open its IPO subscription for the general public from May 6 to May 11. The company will issue 2.51 million shares worth Rs 251.5 million for public investors as part of a total offering of 4.23 million shares. Earlier allocations were made to locals affected by the project and Nepalis working abroad. Investors can apply for a minimum of 10 shares and up to 50,000 shares.
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