KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic and regulatory landscape reflects a mix of market volatility, policy enforcement, and institutional reform. The stock market saw robust trading activity worth Rs 7.60 billion but faced a slight NEPSE index decline, indicating cautious investor sentiment despite selective gains in microfinance and pharmaceutical stocks.
Simultaneously, rising gold prices and continued excess liquidity withdrawals by Nepal Rastra Bank highlight macroeconomic adjustments to stabilize financial conditions.
Regulatory measures, such as mass VAT registration suspensions and a foreign-led bank audit, underscore the government’s commitment to fiscal discipline and transparency.
In policy developments, provinces like Bagmati, Madhesh, and Lumbini are focusing on job creation and infrastructure completion, while national initiatives like ethanol blending and attracting FDI in services signal long-term economic shifts.
Meanwhile, sectors like dairy and mobile imports reveal underlying stress and shifting demand patterns, painting a complex picture of a transitioning economy balancing growth, regulation, and reform.
Stock market records Rs 7.60 billion in transactions
A total of Rs 7.60 billion worth of shares were traded in the stock market today, with 18.5 million shares changing hands. On the first trading day of the week, the NEPSE index dropped by 9.14 points, settling at 2,679.41. While prices of 99 listed securities rose, 148 declined, and one remained unchanged.
Investors in Om Megashree Pharmaceuticals saw gains as its stock hit the positive circuit, yielding Rs 102.40 per share. Additionally, shares of Mahuli Microfinance, River Falls Power Ltd., Unnati Sahakarya Microfinance, and Suryodaya Microfinance rose by 8.25%, 7.74%, 7.24%, and 6.60%, respectively.
Gold price rises by Rs 1,400 per tola on first trading day of the week
On the week’s first trading day, the price of hallmark gold increased by Rs 1,400 per tola, reaching Rs 191,800, according to the Federation of Nepal Gold and Silver Dealers’ Association. On the previous Friday, it was Rs 190,400 per tola. The price of silver remained stable at Rs 2,005 per tola.
NRB continues to withdraw excess liquidity from banks
With excess liquidity persisting in banks and financial institutions, Nepal Rastra Bank is actively withdrawing surplus funds. On Jestha 7 (May 21), the central bank collected Rs 5 billion at an interest rate of 2.99%. Another Rs 3 billion is planned to be withdrawn on Sunday.
At present, banks hold 30% of their investments as loan-eligible. To manage liquidity, NRB continues issuing deposit collection instruments. Due to the current challenges, banks are placing more funds than required, even at low interest rates.
VAT registration of thousands of taxpayers suspended simultaneously for not submitting tax returns
Thousands of taxpayers have had their VAT registrations suspended for failing to file returns. On Baisakh 11 (April 24), the Inland Revenue Department issued a public notice listing those who hadn’t submitted returns for six consecutive months. The department gave a 15-day deadline for compliance.
Taxpayers were advised to contact their respective Inland Revenue Office or Taxpayer Service Office to regularize their status. Since many failed to comply within the timeframe, their VAT registrations were suspended by a decision made on Jestha 9 (May 23).
Bangladeshi company selected to conduct asset quality review of 10 commercial banks in Nepal
Nepal Rastra Bank has appointed a Bangladeshi firm to conduct an asset quality review (loan portfolio audit) of ten major commercial banks in Nepal. Dhaka-based Howladar Yunus & Company was chosen as the technically qualified bidder, according to NRB’s announcement.
Other shortlisted companies included firms from Sri Lanka and India. This review is part of Nepal’s commitment to the International Monetary Fund (IMF) under the Extended Credit Facility (ECF), requiring international auditors to assess the financial health of leading banks.
NCC and NIA disagree on implementing VAT multiple rates
Nepal Chamber of Commerce (NCC) and Nepal Industrial Association (NIA) are at odds over the proposed introduction of multiple VAT rates. Both organizations initially supported the idea, but the Chamber has now changed its stance due to government resistance. The Industrial Association, however, still supports multiple VAT rates as a means of policy reform.
Minister Dahal announces Gwarko flyover to be completed by end of Jestha
Minister Devendra Dahal has confirmed that the ongoing flyover construction in Gwarko, Lalitpur, will be completed by the end of Jestha (mid-June). He expects vehicles to begin using the flyover shortly afterward. During a Sunday site visit, he instructed the construction company to speed up remaining work. “There is no room for delay now,” said Dahal, adding that unless interrupted by a natural disaster, the flyover should be operational by the end of the month.
Foreign Employment Department warns action against consultancies sending workers abroad illegally
The Foreign Employment Department has issued a warning that any party sending Nepali workers abroad illegally will face legal action. The department has received reports that certain individuals, consultancies, travel agencies, training institutes, and language centers have been collecting passports and documents and dispatching workers using forged papers.
Govt’s ethanol blending plan in petrol to be implemented within this year
After two decades of delay, the government’s ethanol-petrol blending initiative is set to be executed within the current fiscal year. A draft procedure for blending ethanol into petrol has been forwarded to the Ministry of Finance and the Ministry of Law for approval.
According to the Ministry of Industry, Commerce, and Supply, preparations are in motion to implement the plan this year. “The draft has been finalized and is currently under review,” said a ministry source.
Nepal’s service sector found to be most attractive to foreign investors
Data from the Department of Industry shows that Nepal’s service sector has emerged as the most appealing destination for foreign investors. As of mid-April, the sector received the highest commitment for foreign direct investment (FDI), totaling NPR 5.7 billion. Of this amount, 53% was committed to services and 37% to tourism. Compared to other sectors, these two continue to draw the most foreign interest.
Bagmati Province prepares final draft of policy program for fiscal year 2082/083
The Bagmati Provincial Government has finalized the policy program draft for fiscal year 2082/083. Subject ministries prepared the draft, which was reviewed in consultations with various stakeholders. The government plans to present the policy program in the Provincial Assembly on Jestha 14 (May 28), with the session starting at 1 p.m. Provincial Chief Deepak Prasad Devkota has been formally invited to deliver the policy speech.
Nepal Insurance Authority Madhesh Province office collects Rs 2.16 billion in non-life insurance premiums in nine months
The Madhesh Province office of the Nepal Insurance Authority collected Rs 2.16 billion in non-life insurance premiums during the first nine months of the current fiscal year. A total of 259,475 policies were issued, and 7,124 claims amounting to Rs 1.60 billion were filed. Of these, Rs 1.08 billion has already been disbursed to 5,585 claimants.
Govt calls for applications for chairperson of National Cooperative Regulatory Authority
The government has issued a public notice inviting applications for the positions of chairperson and expert members of the National Cooperative Regulatory Authority. Applications opened on Sunday in accordance with the Cooperative Act 2074 and the 2082 appointment criteria. Interested and eligible candidates have until Jestha 25 to apply.
NTB to remove CAA’s representation due to poor attendance of Director Adhikari
The Nepal Tourism Board (NTB) is set to revoke the representation of Civil Aviation Authority Director General Pradeep Adhikari, citing his poor attendance record—reportedly attending only one or two meetings annually. Adhikari, who has eight months left in his term, has served as a board member of NTB’s Management Committee for over three years. A proposal for his early removal has been put forward.
Dugad Spices & Food Products records NPR 1,185 million business in first six months
Dugad Spices & Food Products Pvt. Ltd., the distributor of Century brand goods, reported a turnover of NPR 1,185 million in the first half of the current fiscal year. The company had an annual turnover of NPR 2,199 million in 2024 and NPR 2,142 million in 2023. It also launched several new products last year.
Founded in 1999, the company produces and sells a wide range of products including traditional spices, snacks, pickles, jams, cereals, chocolates, dry fruits, and CTC tea.
Mobile phone imports worth Rs 2.4 billion in first 10 months of current fiscal year
According to the Department of Customs, Nepal imported 1,528,000 mobile phones worth NPR 2.4 billion by the end of Baisakh (mid-April). These imports generated NPR 447 million in customs revenue. Compared to the same period last year—when 1,785,000 phones worth NPR 2.876 billion were imported—both the volume and revenue have declined. Last year, the government collected NPR 536 million from mobile imports.
Nepali orthodox tea holds significant share in exports, shows good international market prospects this year
Nepali orthodox tea has shown promising international demand this year, maintaining its position as a key export product. Producers reported strong exports of the first flush, particularly from factories in Ilam.
Tanka Dahal of Greenhill Tea Industries said he exported 8,000 kilograms of first flush tea to India, noting that most factories have already shipped their tea to India and other international markets.
Dairy industry’s outstanding payments to farmers exceed Rs 5 billion
Outstanding payments by the dairy industry to farmers have crossed Rs 5 billion, prompting a high-level meeting led by Agriculture Minister Ramnath Adhikari. The discussion included officials from the Dairy Development Corporation, Department of Animal Services, Dairy Industry Association, Nepal Dairy Association, and the Central Milk Producer Cooperative Federation. Secretary Deepak Kharel noted that some cooperatives diverted funds instead of paying farmers.
Madhesh Province to introduce policy program to create 100,000 jobs
Madhesh Province’s Industry, Commerce and Tourism Minister Basant Kushwaha announced that the government is preparing a policy to generate 100,000 new jobs. Speaking at a Nepal Hotel and Tourism Entrepreneurs Federation event in Birgunj, he said the program would drive employment through investment in agriculture, industry, and tourism.
Lumbini Province to prioritize completion of incomplete projects over new initiatives in FY 2082/083
The Lumbini Provincial Government plans to focus on completing ongoing projects in fiscal year 2082/083 rather than starting new ones. In discussions with Provincial Assembly members, Chief Minister Chetan Narayan Acharya emphasized delivering results on unfinished work. He assured that the budget would reflect practical, ground-level priorities.
Marsyangdi Hydroelectric Plant in Tanahun now producing at full capacity
The Marsyangdi Hydroelectric Plant in Aanbukhaireni Rural Municipality-4, Tanahun, has resumed full-capacity electricity production. After operating at just 40%—around 30 megawatts—during winter due to reduced river flow, the plant is now generating its full capacity of 69 megawatts thanks to increased water flow from the rainy season, according to Chief Engineer Pashupati Gautam.
Executive Director of Nepal Rastra Bank Dr. Prakash Kumar Shrestha retires
Dr. Prakash Kumar Shrestha, Executive Director at Nepal Rastra Bank and a member of the National Planning Commission, has officially retired upon reaching the mandatory age limit. In accordance with the bank’s service regulations, general staff serve up to 30 years, directors up to 12, and executive directors for a maximum of 7 years. Retirement is also compulsory at the age of 58. Dr. Shrestha concluded his service after 27 years.
Comment