KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy presented mixed signals as financial markets weakened while investment commitments and infrastructure spending showed momentum. The stock market fell for a second consecutive day, with NEPSE dropping 42 points amid lower turnover, even as gold prices hit a record high, reflecting global volatility and investor caution.
Although foreign direct investment commitments jumped by 52 percent, actual inflows remained modest, highlighting persistent structural constraints. Credit growth stayed sluggish, with agricultural lending contracting due to weak project demand and rising defaults, while export performance remained uneven, as 12 customs offices reported zero exports despite rising imports, particularly petroleum through Birgunj.
At the same time, provincial governments advanced infrastructure initiatives, regulatory oversight intensified in cooperatives and transport offices, and major projects such as the Kathmandu Ring Road continued to face policy delays, underscoring the contrast between reform efforts and ongoing economic bottlenecks.
NEPSE slides 42 points as correction deepens
The Nepal Stock Exchange (NEPSE) extended its downward trend for a second straight session on Tuesday, shedding 42.58 points to settle at 2,726.51, a decline of 1.53 percent. The drop followed a mild pullback on Monday. The Sensitive Index also fell by 1.56 percent to 464.46. Market turnover declined to Rs 14.17 billion from Rs 16.35 billion a day earlier. Of the 13 trading sectors, only manufacturing and processing posted gains, rising by 1.40 percent. Shares of Saptakoshi Development Bank delivered the highest return at 8.56 percent, while Radhi Bidyut Company topped turnover with transactions worth Rs 578.5 million.
Gold price climbs to Rs 309,300 per tola
Gold and silver prices continued to rise in the domestic market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold gained Rs 300 to reach a new record of Rs 309,300 per tola. Silver prices also rose by Rs 95, trading at Rs 6,870 per tola. In the international market, gold was priced at USD 5,072 per ounce, reflecting ongoing volatility that continues to influence domestic prices.
FDI commitments jump 52 percent to Rs 39 billion
Foreign direct investment (FDI) commitments surged 52 percent year-on-year to Rs 39.19 billion in the first half of the fiscal year, up from Rs 25.77 billion last year. The Department of Industry approved 475 investment proposals, which are expected to generate more than 20,000 jobs. Large-scale industries attracted Rs 23.14 billion through seven projects. However, actual inflows remain limited, with only Rs 7.50 billion received as equity by mid-December 2025. Analysts note that FDI has averaged just 0.28 percent of GDP over the past three decades, citing policy uncertainty and limited market size as major constraints.
Agricultural lending contracts by 2.2 percent amid slowdown
Agricultural lending declined by 2.2 percent in the first five months of the current fiscal year, according to Nepal Rastra Bank (NRB). Although monetary policy aimed for 12 percent growth in private-sector credit, actual expansion stood at just 1.9 percent, reaching Rs 102.24 billion. Total credit outstanding rose to Rs 5.599 trillion by mid-December 2025. Loans to the agriculture sector fell to Rs 408.71 billion from Rs 415.49 billion a year earlier. Bankers attribute the decline to a shortage of viable new projects and a default rate in agriculture that is twice the overall banking average.
Twelve customs offices record zero exports in six months
Twelve of Nepal’s 29 operational customs offices reported no exports during the first half of fiscal year 2025/26. Offices such as Tatopani, Suthouli, Janakpur, and Gautam Buddha Airport were among those with zero export activity. Despite this, Tatopani alone handled imports worth Rs 22.32 billion. Birgunj Customs reclaimed its leading position, accounting for 47 percent of total imports and 34 percent of exports nationwide. Mustang Customs, used as an alternative route after flood damage at Rasuwa and Tatopani, processed imports worth Rs 11.68 billion and exports valued at Rs 203 million.
Bagmati Province approves Rs 3 billion guarantees for infrastructure
The Bagmati Province government has approved multi-year budget guarantees for 46 infrastructure projects across 10 districts. The Ministry of Economic Affairs and Planning allocated an estimated Rs 3.233 billion for roads and bridges, with Rs 1.75 billion earmarked for the current fiscal year and the remainder spread through 2028/29. Key projects include bridges over the Indrawati River in Sindhupalchok and the Bhokari–Sarekhet suspension bridge in Makwanpur. All projects are required to begin the bidding process within the current fiscal year.
Petroleum imports through Birgunj cross Rs 90 billion
Petroleum products worth Rs 90.6 billion were imported through the Birgunj checkpoint in the first six months of the current fiscal year, an increase of Rs 2.75 billion compared to the same period last year. Revenue from these imports reached Rs 37.85 billion. Diesel imports accounted for Rs 45.38 billion, generating Rs 19.85 billion in revenue. Petrol imports stood at Rs 20.98 billion, while LPG gas imports were valued at Rs 14.79 billion, contributing Rs 2.77 billion to state revenue.
Koshi committee urges reforms in transport offices
The Justice, Administration, and Legislation Committee of Koshi Province submitted a 10-point directive to the provincial government following field inspections. Chairperson Kamala Darnal handed the report to Minister Indramani Parajuli on Monday. The report highlights severe damage at the Itahari transport office, where arson during Gen-Z protests destroyed critical records, forcing staff to operate under temporary shelters. It also flagged security risks in offices in Dhankuta, Ilam, and Udayapur, where cash revenues are transported without protection. The committee recommended legal reforms for vehicle ownership transfers by Nepalis abroad and specialized licensing for electric and disability-friendly vehicles.
Rasuwa Customs collects Rs 1.16 billion in revenue
Rasuwa Customs collected Rs 1.16 billion in revenue during the first half of the fiscal year, according to Chief Customs Officer Tulsi Prasad Bhattarai, speaking on the occasion of the 74th International Customs Day. Around 200 cargo containers are currently under inspection. Flood damage caused by the Lhende River in July 2025 has been repaired, allowing space for 250 trucks at the dry port. CG Motor Suppliers was honored for generating Rs 3.21 billion in revenue through electric vehicle imports, while Phinjo Sonam Suppliers was recognized for exports worth Rs 740 million.
Gandaki Province deregisters 35 inactive cooperatives
The Cooperative Registrar’s Office of Gandaki Province has canceled the registration of 35 cooperatives that remained inactive for two consecutive years. The decision, announced on January 24, affected cooperatives in Syangja, Parbat, and Nawalpur, with Syangja recording the highest number at 12. Registrar Bheshraj Rijal stated that the entities failed to comply despite a 35-day notice issued in July 2024. The office clarified that any outstanding liabilities will remain the personal responsibility of the respective board members.
Tax exemption delay stalls Kathmandu Ring Road expansion
The second phase of the Kathmandu Ring Road expansion remains stalled due to delays in approving tax exemptions for Chinese contractors. Officials from the Ministry of Physical Infrastructure said the implementation agreement with China is pending approval from the Finance Ministry. Once cleared, Chinese firms will be exempt from customs and local taxes on construction equipment. The 8.2-kilometer Kalanki–Basundhara stretch includes a bridge at Dhungedhara and disability-friendly overhead crossings. Despite surveys being completed by mid-May 2025, the project has seen no progress for over seven years.
Artificial shortage triggers silver scarcity
Silver has become scarce in the domestic market as traders have stopped sales despite rising demand. The Federation of Nepal Gold and Silver Dealers’ Association claims that banks have halted silver sales, though sources suggest traders themselves may be creating an artificial shortage. Unlike gold, which can only be imported by commercial banks, silver imports are legally permitted for traders. Banks currently hold about 130 kilograms of gold in stock, but slow sales have prompted them to pause further imports within their quotas.
KMC plans Rs 27 million makeover of Khula Manch
Kathmandu Metropolitan City has announced a Rs 27 million project to landscape the open field south of Sainik Manch by planting Bermuda grass. Covering more than 61,000 square meters, the area currently suffers from dust and mud, limiting its use by the elderly and sports enthusiasts. The project includes soil leveling and the installation of eight rainwater harvesting pits. Senior Engineer Arjun Aryal said the contractor has until December 2026 to complete the work, which aims to improve urban aesthetics and create a cleaner public space.
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