KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The recent economic and governance landscape in Nepal reflects a mix of volatility, structural inefficiencies, and sectoral shifts. The stock market showed continued weakness with the Nepse index declining for the sixth straight day, though trading volumes surged, indicating heightened investor activity amid uncertainty.
Meanwhile, Nepal Rastra Bank is taking steps to absorb excess liquidity, even as inflation has slowed and gold prices dipped slightly. Government inefficiencies were underscored by reports of illegal budget transfers across all levels, underutilization of provincial budgets, and the misuse of consumer committees for subcontracting.
Amid these challenges, there is a growing emphasis on reforms—both in capital markets and in the reinstatement of constituency development funds. The customs sector is grappling with logistical strains due to a surge in EV imports, while the Nepal Electricity Authority cited poor grid planning for persistent power outages.
Infrastructure and development efforts are ongoing but hampered by delays, such as in the Babai Irrigation Project and road restoration on Prithvi Highway. On a more optimistic note, rising tourism in areas like Kangchenjunga and proactive climate finance discussions led by FNCCI point toward emerging opportunities in Nepal’s evolving socio-economic terrain.
NEPSE index drops by 2.79 points amid rising trade volume
The Nepse index declined by 2.79 points on Sunday, marking its sixth consecutive day of losses and closing at 2609 points. Despite the fall, the daily trading volume climbed to Rs 8.5 billion, up from Rs 7.08 billion on the previous day. Out of the listed companies, 100 saw price increases, 145 declined, and one remained unchanged.
The ‘others’ category showed the strongest performance, rising by 4.19%, mainly due to significant gains in Nepal Reinsurance and Himalayan Reinsurance. Meanwhile, microfinance and hotel & tourism sectors also posted gains of 1.22% and 1.11% respectively. All other sectors recorded losses, with the trade sector suffering the biggest decline at 2.68%.
Gold prices dip slightly in domestic market
Gold prices fell slightly in Nepal on Sunday. Hallmark gold, previously priced at Rs 184,800 per tola on Friday, dropped to Rs 184,200 per tola. Silver prices, however, remained steady at Rs 1,945 per tola, according to the Federation of Nepal Gold and Silver Dealers Association.
NRB to withdraw Rs 24 billion from banks amid liquidity surplus
Nepal Rastra Bank (NRB) has announced plans to absorb Rs 24 billion from the banking system this Sunday due to excess liquidity in the market. The auction is set for 3 PM and will run for 21 days. Banks and financial institutions can place bids starting at Rs 100 million, in multiples of Rs 50 million. Repayment, including interest, is scheduled for Jestha 25 (mid-June).
Social Security Fund gathers over Rs 79 billion from 2.2 million contributors
The Social Security Fund has amassed Rs 79.42 billion from 2.13 million contributors to date. A majority of the contributors are individuals working abroad, with 1.632 million foreign-employed workers participating. Additionally, 580,000 employees from 20,500 formal sector institutions within Nepal have enrolled in the fund.
NEA attributes frequent power outages to poor grid planning
The Nepal Electricity Authority (NEA) has blamed the unplanned development of the electrical grid for ongoing power outages. In a press release issued Sunday, the NEA explained that tripping issues have long persisted, even during the tenure of Kulman Ghising. These problems typically arise during the pre-monsoon and monsoon seasons due to storms and heavy rain.
PAC forms subcommittee to probe gautam buddha airport irregularities
The Public Accounts Committee (PAC) has formed a subcommittee to investigate alleged irregularities at Gautam Buddha International Airport. The new subcommittee is chaired by Congress MP Manju Khan, replacing former UML MP Yogesh Bhattarai, who had come under fire for submitting a report without thorough investigation. Bhattarai resigned amid increasing scrutiny.
Share investors association proposes market reforms
The Nepal Share Investors Association has submitted reform suggestions to the Ministry of Finance. Among the proposals are increasing public shareholding in state-majority companies and allowing private sector firms to raise capital via pre-IPO and crowdfunding under Sebon oversight. They also recommend treating capital gains tax on shares as final and including it clearly in tax legislation.
Customs overwhelmed by rise in EV imports
Rasuwagadhi and Tatopani customs offices are experiencing severe space shortages due to a sharp increase in electric vehicle imports. The offices have called on importers to promptly clear the vehicles to alleviate congestion. With the surge continuing, officials warn that new parking arrangements will soon be necessary. Similar trends have been observed at Bhairahawa customs as well.
Federal government breaches budget transfer law
Despite legal restrictions on budget transfers during the first three months of the fiscal year, the federal government has been shifting funds across different budget headings.
The 62nd report from the Auditor General revealed that this unlawful practice is not limited to the federal level but has spread to provincial and local levels. The report states that NPR 250 billion was transferred by the federal government, NPR 3 billion by provinces, and NPR 4 billion by local authorities—all in violation of the law.
Inflation slows in Chaitra of fiscal year 2081/82
Nepal Rastra Bank reports a decline in the inflation rate for goods and services in Chaitra of FY 2081/82 compared to the same period last year. Inflation fell to 3.39% from 4.64%, while inflation on food and beverages dropped from 5.21% to 2.45%.
Consumer committees caught subcontracting projects
It has come to light that community-level consumer committees are violating rules by selling project contracts to construction firms. These committees, typically assigned small-scale projects to be completed through local participation, handed off 1,718 contracts to contractors last year alone, according to the Auditor General’s latest report.
Government to reinstate mp and constituency development funds
The government plans to revive the MP Development Fund and the Election Area Infrastructure Development Fund to ensure every electoral constituency receives budget allocations. The proposed allocation has been significantly increased from previous years, rising from Rs 60 million to Rs 220 million per constituency.
FNCCI President stresses private sector role in climate finance
Fncci president Chandra Prasad Dhakal has underlined the need for private sector access to global climate finance mechanisms like the Green Climate Fund. Speaking at the Sagarmatha Sambaad, he stated that Nepal’s business community is already affected by climate change and is ready to contribute to mitigation efforts.
Government mandates mrp labeling on all consumer products
The government has made it compulsory for all consumer goods, both local and imported, to carry Maximum Retail Price (MRP) labels and complete product details. The Department of Commerce, Supply, and Consumer Protection is actively monitoring compliance and penalizing businesses that fail to meet the labeling requirements. This has raised concerns among some business owners.
Bagmati Province spends only 38.91% of budget in 10 months
Bagmati Province has spent just 38.91% of its total budget over the first ten months of the fiscal year 2081/82. According to ministry data, 35.01% of the capital budget and 46.79% of the recurrent budget were utilized, amounting to a total of Rs 25.11 billion.
Babai irrigation project nears completion with 76.5% work done
The Babai Irrigation Project in Bardiya, aimed at irrigating 36,000 hectares, has completed 76.5% of its construction. Initiated under a master plan approved in 2078 BS, the project was set to conclude by 2082/83, but delays due to insufficient budget allocation may extend the timeline and increase costs.
Sudurpaschim government’s irregular spending reaches Rs 3 billion
Sudurpaschim Province has recorded nearly Rs 3 billion in irregular expenditure for FY 2080/81, according to the Auditor General’s latest report submitted to Province Chief Najir Miya. This marks a notable increase from the previous year’s Rs 2.68 billion.
Road clearing in progress at krishna bhir on Prithvi Highway
Repair and clearing efforts are underway at Krishna Bhir on Prithvi Highway after a two-meter section of road collapsed last Ashoj. Engineers from the Nagdhunga-Muglin Road Project are working to restore the road before monsoon season arrives, based on technical evaluations of the damage.
Kangchenjunga attracts rising number of tourists
Kangchenjunga, the world’s third-highest peak, is becoming increasingly popular with both local and international adventure seekers. Recently, a team of 10 climbers, including mountaineers from the UK, Iran, Kosovo, and Nepal, successfully summited the mountain. Over 60 climbers and guides are currently in the region.
Accident risk rises on eastern Asian Highway section
The eastern stretch of the Asian Highway from Kakarbhitta to Laukahi is witnessing a rise in accident risks. Temporary diversions created to facilitate traffic during construction are riddled with potholes, and these are likely to worsen during monsoon rains, posing serious hazards.
Comment