KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape is marked by market volatility, financial sector growth, government policy shifts, and infrastructure challenges. The NEPSE index’s decline highlights investor uncertainty, while rising deposits and loan disbursements indicate improving banking liquidity.
The government’s internal funding of the MCA Nepal project reflects a commitment to infrastructure development but raises concerns over the loss of U.S. aid.
Meanwhile, the expedited completion of hydropower projects and strong IPO oversubscriptions signal growth in key sectors. Policy changes, such as mandatory use of local products and the 1% salary deduction for health insurance, emphasize economic self-reliance and social security reforms.
However, budgetary constraints have stalled projects like the Simkot Airport expansion, while the government’s push for industrial growth and startup funding seeks to boost employment and entrepreneurship.
With climate change threats prompting stronger glacier protection measures, Nepal’s economic trajectory remains a mix of opportunities and persistent funding challenges.
NEPSE Declines by 10.14 Points Amid Market Fluctuations
The Nepal Stock Exchange (NEPSE) on Monday dropped by 10.14 points (0.37%), closing at 2,704.70, continuing its downward trend from the previous session’s 21.63-point loss.
The index fluctuated between 2,739.55 and 2,693.55, with a total turnover of Rs. 5.40 Arba across 57,585 transactions. Himalayan Reinsurance Limited (HRL) led in turnover, while Rapti Hydro (RHGCL) saw the highest gain of 9.86%.
Mahalaxmi Bikas Bank (MLBL) suffered the biggest loss, plunging 5.63%. Sector-wise, the Manufacturing Index edged up 0.44%, while the Trading Index recorded the steepest sectoral decline of 3.38%.
Deposits and Lending Increase in Commercial Banks
The financial sector saw positive momentum, with commercial bank deposits growing by 5.5% and loan disbursements rising by 6% by the end of Falgun in the current fiscal year.
The total deposits in banks reached NPR 60.37 trillion. Among major banks, Nepal Investment Mega Bank reported notable deposit growth, while NIC Asia Bank experienced a decline. The overall liquidity situation in the banking sector is gradually improving.
438 New Industries Registered in Eight Months
Between Shrawan and Falgun of the 2081/82 fiscal year, 438 new industries were registered, with a total investment commitment of NPR 171.35 billion. These industries are expected to generate 23,064 jobs. Among them, 375 are small-scale enterprises with an investment commitment of NPR 23.08 billion, while 23 are medium-scale businesses pledging investments of NPR 8.38 billion.
Nepal Strengthens Glacier Protection and Weather Forecasting Initiatives
At the Nepal National Glacier, Water, and Weather Week (NNGWWW 2025), Energy Minister Deepak Khadka reaffirmed the government’s commitment to glacier conservation and enhanced meteorological forecasting.
He pledged increased budget allocation for glacier protection in the upcoming fiscal year, emphasizing the urgency of climate change mitigation. The event, themed “Glacier Preservation, Closing the Early Warning Gap Together,” promotes awareness of water resource management and the need for policy-driven climate action.
Govt to Fund MCA Nepal Project Internally Amid U.S. Aid Suspension
Following the U.S. suspension of aid, the Nepalese government has committed to funding the Millennium Challenge Account (MCA) Nepal project using internal resources.
The initiative, which includes electricity transmission and road infrastructure, remains a national priority despite funding uncertainty. While experts advocate for diplomatic engagement to restore U.S. financial support, the government has opted to proceed with local resources.
Critics, however, argue that internal financing without diplomatic pressure on the U.S. may not be the most effective approach.
NEA Pushes for Early Completion of Madhya Bhotekoshi Hydropower and Transmission Line
The Nepal Electricity Authority (NEA) is expediting the completion of the Madhya Bhotekoshi Hydropower Project (102 MW) and the Khimti-Bahrabise 400 kV transmission line within a month. Repairs on a leaked tunnel are underway, and the transmission line project is nearing completion. NEA’s Kul Man Ghising has urged rapid progress to ensure stable electricity supply, especially for managing Nepal’s winter power demand.
Flora Expo 2025 Concludes with Over NPR 110 Million in Sales
The 26th Flora Expo, held at Bhrikutimandap, Kathmandu, successfully concluded after four days, recording transactions worth NPR 110.7 million. The final day alone saw sales totaling NPR 21.8 million, with over 59,000 visitors attending the event. The expo featured 83 stalls showcasing ornamental plants, seasonal flowers, and fruit-bearing trees. Organizers are now planning to expand next year’s edition to an international level.
Government Mandates Use of Locally Produced Goods in Public Institutions
The government has directed local and provincial authorities to prioritize domestic products in public institutions. The Ministry of Industry, Commerce, and Supplies has listed 46 types of products, including office supplies, textiles, furniture, food, machinery, and construction materials, that must be sourced locally. A three-tier monitoring system will ensure compliance, and institutions that follow the directive will receive annual incentives.
Government to Deduct 1% Salary for Health Insurance Fund
To address financial shortfalls in the Health Insurance Board, the government has introduced a plan to deduct 1% of salaries from government employees and elected representatives. The collected funds will be matched by the government and deposited into the Health Insurance Fund. This initiative comes as the board struggles with pending claims of Rs. 15 billion. The plan also aims to expand insurance coverage and enhance benefits for policyholders.
Om Megashree Pharmaceuticals IPO Oversubscribed by 16.05 Times
The Om Megashree Pharmaceuticals Limited IPO closed on 3rd Chaitra, 2081, after being oversubscribed by 16.05 times. The company had issued 1.8 million shares (30% of its Rs. 60 Crore capital), with allocations for employees, mutual funds, and Nepali workers abroad. Prabhu Capital managed the IPO, which saw 19,88,836 applicants requesting a total of 23.69 million shares. CARE Ratings Nepal reaffirmed the company’s ‘CARE-NP BB- (Is)’ rating, indicating moderate default risk. Established in 2016, Om Megashree operates a pharmaceutical plant in Chitwan, with partial production commencing on February 19, 2024.
Crest Micro Life Insurance IPO Allotment Scheduled for 5th Chaitra
The IPO allotment for Crest Micro Life Insurance Limited is set for 5th Chaitra, 2081, at NIMB Ace Capital, Lazimpat. Out of the 22,50,000 shares issued, 1,845,000 units were allocated to the general public. The IPO was highly oversubscribed, with 20,50,633 applicants requesting 24.51 million shares. As a result, only 1,84,500 applicants will receive shares. ICRA Nepal assigned a BB rating, indicating moderate risk. Licensed in April 2023, Crest operates from Surkhet with a paid-up capital of NPR 525 million, backed by major institutional investors.
Simkot Airport Expansion Stalled Due to Budget Constraints
The Simkot Airport expansion project has been on hold for a year due to insufficient government funding. While all district-level approvals are in place, the project still requires land acquisition, which has not been budgeted. Mahendra Bahadur Singh, chief of Simkot’s Civil Aviation Authority, stated that delays have increased projected costs, affecting nine private properties. The expansion requires an additional 60.81 square meters of land.
Startup Loan Applicants Asked to Contact IBID for Business Presentation
The Industrial Business Development Institute (IBID) has requested shortlisted startup loan applicants to contact them by Chaitra 12 to schedule their business project presentations on Chaitra 13, 14, and 15. A total of 1,314 projects were selected from 5,158 applications for the second phase evaluation. IBID aims to finalize credit assessments and disburse loans by the third week of Chaitra.
NGO Federation Submits 21-Point Declaration to PM Oli
The NGO Federation of Nepal has submitted a 21-point declaration to Prime Minister KP Sharma Oli, advocating for policies that support social organizations. Federation President Arjun Kumar Bhattarai led the delegation to Baluwatar, emphasizing the need for a Nepal Development Conference. PM Oli congratulated the newly elected 51-member committee, with Bhattarai serving as President.
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