KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic indicators reveal a mixed picture of improving financial stability but weakening investment momentum and persistent structural inefficiencies. The decline of the NEPSE index for a third consecutive session, falling turnover, and lower deposit interest rates suggest subdued investor confidence despite ample liquidity in the banking system, prompting Nepal Rastra Bank to absorb Rs 30 billion through a deposit collection instrument.
Although the insurance sector showed strong expansion, with premiums rising to Rs 51.92 billion, and customs revenue improved in Saptari, public capital expenditure remained uneven, particularly in the Ministry of Culture, Tourism and Civil Aviation, where only 16.21 percent of capital allocations were spent.
The government’s new public financial management reform strategy signals recognition of long-standing governance and spending challenges, while the Finance Act 2026 attempts to provide greater clarity for foreign aid-funded projects. Rising egg and chicken prices after avian influenza-related supply disruptions indicate continuing vulnerability in agricultural supply chains.
At the same time, the CIB’s arrests linked to alleged bank credit misuse and Rs 1.896 billion in hundi transactions highlight ongoing concerns over financial discipline, regulatory enforcement, and the integrity of Nepal’s financial system.
NEPSE declines 7.79 points as turnover drops
The Nepal Stock Exchange (NEPSE) fell by 7.79 points, or 0.28 percent, on Wednesday, closing at 2,688.88 and extending losses for a third straight trading day. Daily turnover decreased to Rs 4.029 billion from Rs 4.427 billion recorded on Tuesday. A total of 9.78 million shares of 343 companies were traded through 48,072 transactions. Share prices of 78 companies increased, while 186 declined and 11 remained unchanged. Only the mutual fund and “others” sub-indices posted gains, while the remaining 11 sectoral indices ended lower. Himalaya Power Partner recorded the highest turnover at Rs 224.8 million, and Everest Color emerged as the top gainer with a 14.99 percent increase.
Gold falls to Rs 283,200 per tola, silver edges higher
Gold prices declined in the domestic market on Wednesday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of fine gold fell by Rs 1,000 per tola to Rs 283,200, down from Rs 284,200 on Tuesday. Silver prices increased by Rs 10 per tola and were traded at Rs 4,320, compared with Rs 4,310 the previous day.
NRB launches Rs 30 billion deposit collection instrument
Nepal Rastra Bank (NRB) on Wednesday invited bids to absorb Rs 30 billion from the banking system through a 61-day deposit collection instrument aimed at managing excess liquidity. Licensed Class A, B, and C financial institutions participated in the online competitive bidding process. The principal and accrued interest are scheduled to be repaid on September 28, 2026.
Average deposit rates continue to decline
Nepal Rastra Bank reported that the weighted average deposit interest rate of commercial banks fell to 3.29 percent by the end of the eleventh month of fiscal year 2025/26, down from 4.29 percent in the mid-May to mid-June period. Development banks recorded an average deposit rate of 3.62 percent, while finance companies stood at 4.46 percent. The share of fixed deposits in total bank deposits dropped from 58.8 percent at the end of fiscal year 2023/24 to 37.3 percent by mid-June 2026. Analysts have expressed concern that lower deposit rates may reduce real returns for savers, especially with annual consumer inflation at 5.22 percent.
Govt unveils implementation plan for public financial management reforms
The Ministry of Finance has released the implementation plan for the Third National Public Financial Management Reform Strategy (2026–2030), aimed at improving transparency, accountability, and efficiency in public spending. Prepared through consultations with multiple institutions, the plan includes timelines, performance indicators, and responsible agencies for each reform activity. A separate Monitoring, Evaluation, and Learning Plan (2026–2030) has also been established to track progress through structured reporting and results-based assessment. The government expects the reforms to strengthen financial discipline, promote good governance, and improve public service delivery.
Finance Act 2026 clarifies tax exemptions for foreign aid contractors
The Finance Act, 2026 has clarified income tax exemption provisions for contractors and service providers working under bilateral or multilateral foreign aid agreements. Section 28 states that projects covered by implementation letters approved by the Council of Ministers are eligible for income tax exemptions for fiscal years preceding 2025/26. Economists note that bilateral development assistance funded by partner governments has traditionally been exempt from local taxation to preserve project resources, while tax exemptions linked to multilateral lending have become more limited.
Non-life insurance premiums rise to Rs 51.92 billion
Nepal’s non-life insurance companies collected Rs 51.92 billion in premiums during fiscal year 2025/26, up from Rs 44.91 billion a year earlier. A total of 3.46 million insurance policies were issued, providing coverage worth Rs 165 billion. Among the 14 operating insurers, Shikhar Insurance recorded the highest premium income at Rs 6.51 billion, followed by Sagarmatha Lumbini Insurance and Himalayan Everest Insurance. Four micro-insurance companies together collected Rs 1.31 billion. Bagmati Province generated the highest premium income at Rs 35.80 billion, while Karnali Province recorded the lowest at Rs 50.4 million. Motor insurance remained the largest source of premium income, contributing Rs 15.48 billion.
Tourism ministry records low budget utilization
The Ministry of Culture, Tourism and Civil Aviation spent only 31.68 percent of its annual budget allocation in fiscal year 2025/26, according to fourth-quarter progress data. The ministry used about Rs 2.43 billion out of a total allocation of Rs 7.68 billion. Recurrent expenditure reached 54.14 percent, while capital expenditure remained low at 16.21 percent. Weak spending performance by key agencies, including the Department of Tourism and the Department of Archaeology, contributed to the low overall utilization rate. The ministry’s central administration spent Rs 93 million out of its Rs 218.4 million operational budget.
MEC approves Rs 6.55 billion budget for FY 2026/27
The Medical Education Commission (MEC) has approved a budget and program worth Rs 6.552 billion for fiscal year 2026/27. The decision was taken at the commission’s 27th meeting chaired by Prime Minister Balendra Shah at the Office of the Prime Minister and Council of Ministers. Of the total amount, Rs 5.992 billion will come from the government and Rs 560.4 million from the commission’s internal resources. The commission allocated Rs 474.2 million from internal resources for recurrent expenditure and Rs 86.2 million for capital expenditure. The meeting was attended by Minister for Education, Science and Technology Sasmit Pokharel, Minister for Health and Population Nisha Mehta, MEC Vice-Chairperson Prof. Dr. Devendra Bahadur Khatri, Member-Secretary Basanta Prasad Koirala, and other officials.
Tilathi Belhi Customs Office collects Rs 7.42 billion
The Tilathi Belhi Customs Office in Saptari collected Rs 7.42 billion in revenue during fiscal year 2025/26, achieving 90.1 percent of its annual target. The office reported improved revenue performance compared with fiscal year 2024/25, when it achieved 80.93 percent of its target. Officials said infrastructure delays, particularly in road and bridge construction, continued to affect customs operations in the area.
Nepal imports nearly 4 million kg of tissue and paper products in a year
Nepal imported 3,989,677 kilograms of toilet paper, tissue paper, napkins, and facial tissues during the last fiscal year, according to the Department of Customs. The imports were worth Rs 698.4 million and generated Rs 187.6 million in customs and other government revenue. India was the largest supplier, accounting for 3,354,640 kilograms valued at Rs 563.2 million. Bangladesh and China were the next major sources, while smaller quantities were imported from Japan, Thailand, Qatar, Saudi Arabia, Hong Kong, the United States, and Kuwait.
Syangja achieves 67.72 percent capital expenditure in FY 2025/26
The District Treasury Controller Office in Syangja reported that capital expenditure reached Rs 1.376 billion out of a total allocation of Rs 2.031 billion under federal and provincial budgets in fiscal year 2025/26. Federal capital spending reached 81 percent, with Rs 141.2 million spent out of Rs 173.3 million. Provincial capital expenditure stood at 66 percent, with Rs 1.234 billion utilized from an allocation of Rs 1.858 billion.
Egg and chicken prices increase as poultry market recovers
The Nepal Layers Poultry Farmers Association has raised the support price of large eggs by Rs 30 to Rs 530 per crate, effective Tuesday, following supply shortages caused by avian influenza. The outbreak led to the destruction of about one million laying hens and reduced daily egg production from 4.3 million to 2.8 million between March and July. Current prices have reached Rs 500 for medium eggs, Rs 545 for extra-large eggs, Rs 70 for broiler chicks, and Rs 215 per kilogram for live broiler chickens. Despite the increase, producers say they are still facing losses because operating costs remain higher than market returns. The Department of Livestock Services said no new bird flu infections have been reported nationwide since July 17, after 835,563 birds were culled across the country.
Goldstar partners with Goldstar Japan to expand into Japanese market
Goldstar Stride has entered into a strategic partnership with Goldstar Japan Company to promote the production, distribution, and branding of Goldstar footwear in Japan. The agreement was signed after a multi-stage technical inspection of Goldstar’s manufacturing facilities in Nepal. Company officials said the partnership is intended to help the brand meet the quality standards expected by Japanese consumers.
CIB arrests Prabhu Bank chief business officer
The Central Investigation Bureau has arrested Prabhu Bank Chief Business Officer Rashmi Pant from Tinkune, Kathmandu, in connection with an investigation into alleged banking offenses involving misuse of credit. The arrest follows the detention of Asian Village Resort Chairman Shashi Dhar Sharma, who is accused of using Rs 480 million in commercial loans obtained from Prabhu Bank for resort construction and land acquisition to settle liabilities of other borrower companies without proper collateral mortgage registration. The allegations emerged from a special supervisory inspection conducted last month.
CIB arrests man over alleged Rs 1.896 billion hundi transactions
The Central Investigation Bureau (CIB) has arrested 49-year-old Rajendra Prasad Rijal of Dhading, currently residing in Nagarjun Municipality-8, Kathmandu, on charges related to illegal financial transactions. According to investigators, analysis of suspicious banking activities showed that he allegedly used personal bank accounts to conduct unauthorized hundi transactions totaling Rs 1.896 billion. Further legal proceedings are continuing under a detention order issued by the Kathmandu District Court.
Koshi announces relief package for Dewanaganj shooting victims
The Koshi Provincial Government has announced Rs 200,000 in financial assistance for each family of those killed during the recent unrest in Dewanaganj, Sunsari. Families affected by property damage and injured individuals will receive Rs 50,000 each. The decisions were made during an all-party meeting convened by Chief Minister Hikmat Kumar Karki on Wednesday. The meeting also adopted an eight-point framework aimed at restoring social harmony, strengthening security monitoring in border areas, and coordinating treatment and relief measures with the federal government.
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