KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The developments present a mixed but revealing picture of Nepal’s economy and governance, marked by financial resilience amid structural and operational strains. While the stock market slipped modestly, strong trading volumes and record-high gold and silver prices point to cautious investor behavior and a continued preference for safe assets under global uncertainty.
The banking and insurance sectors show solid profit growth, driven largely by accounting adjustments and expanding premiums, even as rising non-performing loans signal underlying stress. In contrast, the failure to secure bids for electricity imports highlights pricing and energy security challenges, while delays in grant systems and added costs for migrant workers expose administrative and diplomatic weaknesses.
Government initiatives—from boosting agricultural spending and revising hotel standards to expanding transmission infrastructure—suggest policy intent toward long-term reform and sustainability, yet uneven implementation and regional tensions continue to limit their immediate impact.
NEPSE slips 17.53 points to close at 2,714.05
The Nepal Stock Exchange (NEPSE) ended the final trading day of the week (Thursday) lower, shedding 17.53 points, or 0.64 percent, to settle at 2,714.05 on Thursday. The Sensitive Index also declined by 1.55 points to 462.71. Trading activity remained strong, with more than 35.47 million shares exchanged and a turnover of Rs 14.56 billion. While hydropower and investment sub-indices posted slight gains, development bank and manufacturing sectors fell by more than two percent. Ngadi Group Power Limited led turnover with transactions worth Rs 599.9 million, closing at Rs 430 per share.
Gold and silver prices hit record highs
Gold prices surged to a new all-time high in the domestic market on Thursday, rising by Rs 20,500 per tola to reach Rs 339,300, according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver prices also increased by Rs 205 to Rs 7,505 per tola. Internationally, gold and silver extended their rally amid global uncertainty, with spot gold climbing to over USD 5,538 per ounce and silver nearing USD 119 per ounce, both setting fresh records.
Commercial banks post Rs 30.52 billion in net profits
Nepal’s 20 commercial banks recorded a combined net profit of Rs 30.52 billion in the first half of fiscal year 2025/26, marking a 12 percent increase year-on-year. However, the sector continues to face pressure as non-performing loans rose from 4.51 percent to 5.09 percent following unrest in September 2025. Nabil Bank topped the list with Rs 4.75 billion in profit, while Kumari Bank posted the sharpest growth, surging 907 percent to Rs 2.72 billion. In contrast, Laxmi Sunrise Bank reported a loss of Rs 270 million, and Citizens Bank saw profits drop by 47 percent. Banks have collectively set aside Rs 28.74 billion for loan loss provisions.
No bids submitted for 100 mw electricity import from India
The Nepal Electricity Authority (NEA) failed to receive any bids for its tender to import 100 megawatts of electricity from India during the dry season. The tender, issued on January 19 and closing on January 28, sought power supply from February to May. NEA spokesperson Rajan Dhakal said the ceiling prices, INR 6.60 per unit for February–March and INR 6.90 for April-May, were likely unattractive to Indian suppliers. As a result, NEA will rely on purchases through the India Energy Exchange (IEX) and coordination under the Nepal–India Power Exchange Committee. NEA currently has approval to import up to 654 MW via IEX.
Development banks see 32 percent jump in profits
Development banks registered a 32 percent rise in net profit, reaching Rs 3.424 billion in the second quarter of the current fiscal year. The growth was largely driven by reduced impairment charges and lower provisioning costs. Muktinath Bikas Bank led the sector with profits of Rs 672 million, followed closely by Garima Bikas Bank with Rs 635.1 million. While most national-level development banks posted gains, Salpa, Sindhu, and Narayani development banks remained in the red. Excel Development Bank rebounded strongly, returning to profit with Rs 88.5 million after previous losses.
Govt plans overhaul of hotel star-rating system
The Ministry of Culture, Tourism and Civil Aviation is preparing to revise hotel star-rating criteria, shifting emphasis from room numbers to service quality, sustainability, and environmental standards. Director General Ram Krishna Lamichhane said the upcoming “Green Hospitality” framework will prioritize eco-friendly infrastructure and local character. The current requirement for five-star hotels in Kathmandu to have at least 100 rooms has long been criticized by the Hotel Association of Nepal. As of August 2025, Nepal has 214 star-rated hotels offering more than 20,343 beds. A committee involving ICIMOD and NATHM aims to finalize the revised standards within a month.
New life insurance business grows by over 36 percent
Nepal’s life insurance sector saw strong growth in new business, with first-time premium collections rising by 36.60 percent in the first half of fiscal year 2025/26. According to the Nepal Insurance Authority, 14 life insurers collected Rs 21.64 billion in new premiums, up from Rs 15.84 billion a year earlier. Nepal Life Insurance led the market with Rs 5.99 billion in new business, while IME Life recorded the highest growth rate at 84 percent. Renewal premiums also increased by 14.75 percent to Rs 72.73 billion, signaling a broad recovery across the sector, except for one company.
Governments agree to allocate 10 percent budget to agriculture
The federal, provincial, and local governments have committed to allocating a minimum of 10 percent of their budgets to the agriculture sector. The decision was made during the 11th thematic committee meeting chaired by Agriculture Minister Dr. Madan Prasad Pariyar in Bardiya. Discussions focused on strengthening food safety laws, improving minimum support price mechanisms, streamlining fertilizer distribution, and reducing duplication in subsidy programs. Authorities also pledged to expand agricultural insurance and encourage youth participation in farming.
National conference explores AI in capital market
The first national conference on “Capital market in the AI era” was held on Thursday, jointly organized by Nepal Open University and Ace Institute of Management. The event brought together researchers, regulators, and investors to discuss the use of artificial intelligence in Nepal’s stock market. NEPSE Chairman Hemanta Bashyal highlighted both regulatory challenges and the potential of AI-driven investment tools. Participants emphasized the need for updated legal frameworks to address algorithmic trading and manage emerging technological risks.
Speaker orders enforcement of MP benefits act
Sudurpashchim Province Speaker Bhim Bahadur Bhandari instructed the provincial government to implement the Office Bearers and Members’ Benefits Act, 2018. The directive follows a September 2025 order from the federal finance ministry that led to salary suspensions for personal staff of provincial lawmakers. Speaker Bhandari argued that the federal intervention undermines provincial autonomy guaranteed under the Constitution. Lawmakers expressed frustration that while staff salaries remain unpaid, amendments to the Local Service Act are moving forward.
Kohalpur-Surkhet 132 kv transmission line completed
Construction of the Kohalpur–Surkhet section of the 132 kV transmission line has been completed, according to the Nepal Electricity Authority’s Karnali Province office. Provincial chief Shashibhushan Shah said testing of the double-circuit line will begin on Friday. The project, jointly funded by the government and NEA, is expected to improve power reliability in Banke, Bardiya, and Surkhet. NEA has urged the public to maintain a safe distance from transmission infrastructure during the testing phase.
Migrant workers face extra cost for uae police verification
Nepali migrant workers heading to the UAE are facing an additional expense of more than Rs 14,000 for mandatory police report verification. Following Gen Z-led protests, the UAE made police clearance compulsory, charging AED 353.27 through VFS Global. Recruitment agencies have criticized the government for failing to intervene diplomatically, noting that workers already spend Rs 200,000 to Rs 400,000 on recruitment despite the official “free visa, free ticket” policy. The UAE remained Nepal’s top labor destination in 2024/25, issuing permits to over 274,000 workers.
Dang attracts over Rs 720 million in new investment
Dang district recorded new investments worth Rs 720.8 million in the first six months of fiscal year 2025/26, according to the Cottage and Small Industries Office. Of the total, Rs 423.2 million was invested in small industries and Rs 297.5 million in commercial ventures. During the period, 588 new firms were registered, creating employment for 962 people. However, 248 businesses shut down, with owners citing debt burdens and weak demand as reasons for leaving the country.
Technical issues delay local grant submissions
Local and provincial governments have been unable to submit proposals for special and complementary grants due to technical problems in the National Planning Commission’s online system. Officials said the portal is undergoing updates following amendments to grant guidelines. Although no proposals had been received as of January 27, the commission has ruled out extending the February 12 deadline and advised local units to prepare documents in advance.
Ridge line energy to open Rs 118 million IPO
Ridge Line Energy Limited will issue an initial public offering to the general public from February 11, offering 1.18 million ordinary shares at a face value of Rs 100 each. The Rs 118 million issue follows earlier allocations to local residents and Nepali workers abroad. Investors can apply for between 10 and 50,000 shares through the C-ASBA system until February 16. Care Ratings Nepal has assigned the IPO a “CARE-NP BB” rating, indicating moderate risk. Prabhu Capital Limited is managing the issue.
Heavy snowfall blocks cargo at Nechung customs
Severe snowfall in Upper Mustang has stranded several cargo containers at Nechung Customs in Lo Manthang Rural Municipality-4. Local officials said the containers had reached the Korala border point to collect goods but were unable to return due to a blizzard on Monday night. While transport has been disrupted, farmers in high-altitude areas welcomed the snowfall, which is expected to benefit winter crops and improve soil moisture.
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