KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The developments outlined present a mixed and fragile picture of Nepal’s economy and governance, marked by fiscal strain, uneven growth, and structural vulnerabilities. While commercial banks have posted higher profits and the tax base continues to expand, rising non-performing loans, weak capital expenditure, and significant revenue shortfalls at both federal and provincial levels point to underlying inefficiencies in public finance management.
Heavy election-related spending amid subdued development outlays raises concerns about long-term fiscal priorities, even as major infrastructure projects like the Kathmandu-Terai Fast Track show steady but incomplete progress. External pressures, including tighter US migration policies and declining numbers of skilled migrant workers, add to domestic challenges such as market manipulation by middlemen, climate-related losses in agriculture and industry, and rising commodity price volatility.
Together, these trends suggest an economy that is active but imbalanced-sustained by consumption, remittances, and banking-sector resilience, yet constrained by governance gaps, weak implementation capacity, and growing exposure to policy, climate, and external shocks.
Gold price falls sharply to Rs 318,800 per tola
Ending a prolonged upward trend, gold prices declined sharply in the domestic market on the final trading day of the week. According to the Federation of Gold and Silver Dealers’ Association, gold was priced at Rs 318,800 per tola, down from Rs 339,300 a day earlier. Silver also fell to Rs 7,065 per tola. In the international market, gold traded at USD 5,537 per ounce and silver at USD 117 per ounce.
Rs 19.15 billion approved for elections, Rs 6.36 billion disbursed
The Ministry of Finance has approved funding of Rs 19.15 billion for the parliamentary elections scheduled for March 5, of which Rs 6.36 billion has already been released. The Election Commission received source approval of Rs 6.736 billion, with Rs 6.31 billion disbursed by January 2026. Security-related allocations include Rs 10.39 billion for the Ministry of Home Affairs, Rs 1.94 billion for the Nepal Army, and Rs 28 million for the National Investigation Department.
Finance Ministry reports 46 percent budget spending
The Ministry of Finance has made public its second-quarter progress report for fiscal year 2025/26, showing that 46.06 percent of the total annual budget had been spent by mid-January. Of the total allocation of Rs 1.964 trillion, government spending reached Rs 904.64 billion. Recurrent expenditure stood at 40.82 percent, while capital spending remained weak at just 11.66 percent, amounting to Rs 47.54 billion. The report also highlighted a revenue gap of Rs 129.8 billion against the mid-year target of Rs 711.2 billion.
Lumbini Province records wide revenue-expenditure gap
Lumbini Province has reported a sharp imbalance between income and spending during the first half of fiscal year 2025/26. While expenditures totaled Rs 7.95 billion, internal revenue collection stood at just Rs 925 million, far below the target. Capital spending reached only 18.04 percent of the allocated Rs 23.47 billion. Federal grants also fell short, with Rs 5.66 billion received against a target of Rs 14.1 billion. Revenue from vehicle taxes and land registration reached just 37.47 percent and 16.91 percent of projected targets, respectively.
Commercial bank profits climb to Rs 30.59 billion
Nepal’s 20 commercial banks collectively earned Rs 30.59 billion in net profit during the second quarter of fiscal year 2025/26, marking an 11.51 percent year-on-year increase. However, nine banks, including NIC Asia and Agriculture Development Bank, reported declines in profit. Nabil Bank topped the list with Rs 4.75 billion in earnings, supported by a Rs 1 billion recovery from a Chinese court settlement. Despite overall profit growth, the average non-performing loan ratio rose to 5.08 percent, prompting banks to allocate Rs 28.75 billion for loan loss provisions.
US ends subsidies for Nepali migrants under Trump administration
The United States government under President Donald Trump has introduced strict measures ending taxpayer-funded subsidies for foreign nationals. According to the Nepali Embassy in Washington, immigrants and visitors are no longer eligible for subsidized healthcare, housing, education, or family assistance. Providing false information to access such benefits will lead to immediate cancellation of visas or green cards. Additionally, a mandatory “Visa Bond” ranging from USD 5,000 to USD 15,000 has been introduced for B1/B2 visa applicants starting January 21, 2026. The US Embassy in Nepal has advised applicants not to pay any bond prior to official interviews.
Kathmandu–Terai fast track achieves 45 percent physical progress
Construction of the Kathmandu–Terai Fast Track has reached 45.16 percent physical completion. The Rs 2.13 billion project, overseen by the Nepal Army, has achieved tunnel breakthroughs in four of the planned seven tunnels at Dhedre and Lendanda. Two additional tunnel pairs are expected to be completed within the current fiscal year. The 70.97-kilometer expressway includes 89 bridges, of which 13 major structures have been completed. The project aims to reduce travel time between Kathmandu and Nijgadh to under an hour and is scheduled for completion by April 13, 2027.
Share of skilled migrant workers declines in 2025/26
Statistics from the Department of Foreign Employment show a decline in the proportion of skilled Nepali workers going abroad. During the first half of fiscal year 2025/26, only 250,000 of the 402,074 labor permit holders—around 64 percent—were classified as skilled, down from 72 percent during the same period last year. Meanwhile, the number of unskilled workers increased sharply from 59,524 to 93,550. Experts attribute this trend to the continued failure to implement mandatory training provisions outlined in the 2018 skill development guidelines.
Tax base expands with 379,000 new registrations
The Ministry of Finance reported that 379,212 new taxpayers were added during the first half of the current fiscal year. These included 55,242 Business PAN registrations, 304,890 Personal PANs, and 13,257 VAT registrants. With these additions, the total number of PAN holders has reached 7.36 million, while VAT registrations stand at nearly 365,000. An additional 4,952 taxpayers registered for excise duty, bringing the total in that category to 129,949. The expansion reflects ongoing efforts to formalize the economy and broaden the tax base.
Commerce department flags middlemen-driven food price hikes
The Department of Commerce, Supplies and Consumer Protection has reported significant price volatility caused by middlemen in its market review covering mid-December 2025 to mid-January. While prices of Sona Mansuli rice declined, basmati rice and pulses became more expensive. Vegetables and spices showed extreme fluctuations, with prices of hybrid beans and cucumbers rising by 109 to 160 percent. Based on studies in six major cities, including Kathmandu and Birgunj, the department recommended dismantling cartels and market syndicates to protect consumers.
PPMO seeks explanation from nine construction companies
The Public Procurement Monitoring Office has issued a seven-day notice demanding clarification from nine construction firms and suppliers. The move follows the companies’ failure to respond to earlier 30-day notices regarding proposed blacklisting for non-performance. If the firms fail to provide satisfactory justification within the new deadline, they will be barred from participating in future public procurement processes.
KMC begins box culvert construction to curb monsoon flooding
Kathmandu Metropolitan City has started building box culverts in Bagbazar and Babarmahal to reduce flood risks during the monsoon. A Rs 5.7 million contract has been signed to replace old pipes along the Tukucha stream near Putalisadak, with completion expected by April 13. Another culvert costing Rs 2.212 billion will be constructed near Rosebud School over the Dhobi Khola, replacing a bridge damaged in 2023. Traffic diversions will be managed in coordination with traffic police.
Nepal Telecom opens applications for 80 permanent posts
Nepal Telecom has called for applications to fill 80 permanent positions through open and inclusive competitive examinations. The vacancies span 12 job categories, from Junior Technician (Level 3) to Deputy Manager (Level 9). Interested candidates can apply online by February 19, while late submissions with double fees will be accepted until February 26.
Kohalpur–Surkhet 132 kV transmission line enters testing phase
The Kohalpur–Surkhet 132 kV double-circuit transmission line has been completed under a joint initiative of the Government of Nepal and the Nepal Electricity Authority. According to NEA Karnali Provincial Chief Shashi Bhushan Shah, testing of the line will begin today. The NEA has urged residents of Banke, Bardiya, and Surkhet to maintain a safe distance from towers and electrical structures during the trial period before the line is connected to the national grid.
Winter rain destroys raw bricks worth Rs 100 million in Banke
Continuous winter rainfall over two days has severely damaged the brick industry in Banke district. According to the Lumbini Brick Entrepreneurs Association, between five and ten million raw bricks were destroyed in a single kiln. Total losses in Banke alone are estimated at Rs 100 million, affecting nearly 100 brick industries across Banke and Bardiya. Since raw bricks are uninsured, producers will bear the losses, likely pushing up brick prices, currently at Rs 15 per piece.
Singapore Airlines to operate wide-body aircraft on Kathmandu route
Singapore Airlines will deploy wide-body aircraft on two of its seven weekly flights between Singapore and Kathmandu during March and April to meet peak seasonal demand. The aircraft will offer 337 seats, including 36 in business class. The move coincides with Nepal’s spring trekking season and increased travel by Nepalis living abroad.
Parbat exports oranges worth Rs 320.5 million
Orange farmers in Parbat district earned Rs 320.5 million in export revenue during the current fiscal year, producing 3,421 metric tons. Banskharka area alone contributed Rs 200 million. Farmers received between Rs 95 and Rs 120 per kilogram at farm gates. Improved road access, including the Mid-Hill Highway, enabled traders to reach remote production areas. More than 400 commercial farmers now cultivate oranges across 833 hectares.
Laxmi Sunrise Bank sets aside Rs 4.47 billion for bad loans
Laxmi Sunrise Bank has allocated Rs 4.473 billion for loan loss provisioning in the second quarter of fiscal year 2025/26, the highest among commercial banks. This represents a 131.86 percent increase from last year. Nepal Investment Mega Bank followed with Rs 3.9 billion. As sector-wide non-performing loans averaged 5.08 percent, total provisions across banks reached Rs 28.78 billion.
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