KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s current economic landscape presents a mixed picture, reflecting both policy-driven momentum and structural constraints. The NEPSE index’s decline despite a high turnover of Rs 9.13 billion signals investor uncertainty amid market volatility, compounded by Finance Minister Paudel’s call for capital market reforms and independence of SEBON.
Meanwhile, macroeconomic indicators show conflicting trends—while gold prices have dropped sharply and excess liquidity has led NRB to auction a deposit instrument, increased budget allocations for infrastructure and smart city planning indicate development ambitions.
Similarly, tourism is rebounding with over 501,000 arrivals by May 2025, and life insurance coverage has reached record levels. However, persistent delays in corona insurance payouts, policy disputes over electricity trade with Bangladesh, and controversy surrounding customs hikes for iron industries highlight governance and policy coordination challenges.
Amid these, sector-specific progress, such as tunnel and hydropower development and subsidized fertilizer distribution in Jumla, underscores efforts toward long-term resilience despite fiscal, trade, and institutional hurdles.
NEPSE index falls by double digits, turnover nears Rs 9.14 billion
The Nepal Stock Exchange (NEPSE) index dropped significantly today, losing 11.06 points to close at 2,629.89. A total of 313 companies participated in trading, with 19,992,181 shares exchanged over 86,636 transactions. The day’s total turnover reached approximately Rs 9.13 billion.
Despite the overall market decline, the Hydropower sector gained 1.22%, and the Hotels and Tourism sector saw a marginal rise of 0.12%. All other sectors recorded losses, with Banking down by 1.05%, Development Banks by 0.06%, Finance by 0.91%, Investment by 0.08%, and Life Insurance by 0.77%.
Gold price drops by Rs 3,000 per tola
Gold prices fell sharply on Sunday, dropping by Rs 3,000 per tola. According to the Federation of Nepal Gold and Silver Dealers’ Association, hallmark gold is now priced at Rs 190,700 per tola, down from Rs 193,700 on Friday. Silver prices also saw a minor dip, falling from Rs 2,150 to Rs 2,145 per tola.
Govt increases budget for new city and infrastructure development
The government has set aside Rs 1.7028 billion for new city construction and development initiatives for the fiscal year 2082/083 (2025/26), up from Rs 1.6279 billion in the current fiscal year. This represents an increase of Rs 74.9 million, or 4.6%. Plans for the upcoming year include feasibility studies and planning for smart city and eco-village infrastructure.
NRB to auction 42-day deposit instrument as liquidity rises
In response to growing liquidity in the banking system and declining investment demand, Nepal Rastra Bank (NRB) has announced a 42-day deposit instrument auction. The auction, scheduled for Sunday, will absorb Rs 2.5 billion from the market. The central bank introduced this tool as part of efforts to manage excess liquidity, which has persisted since the beginning of the fiscal year and intensified as the year-end approaches. Falling interbank rates have added to the urgency of this measure.
Finance Minister warns against influence on SEBON, urges market reforms
Finance Minister Bishnu Prasad Paudel has cautioned against undue pressure being placed on the Securities Board of Nepal (SEBON) and emphasized the need for capital market reform. Speaking at SEBON’s 33rd anniversary event on Sunday, he stressed the importance of taking legal action against insider trading. “We must penalize wrongdoers and encourage those doing good work. Institutions like SEBON must be shielded from external pressure to ensure stronger regulation,” he stated.
Chamber of Commerce welcomes budget’s focus on policy stability
The Nepal Chamber of Commerce has praised the government’s budget for fiscal year 2082/83 (2025/26), citing its emphasis on maintaining policy stability—a long-standing demand of the private sector. In a statement issued Saturday, the Chamber acknowledged the inclusion of its economic reform suggestions and called for strong implementation. The Chamber reaffirmed that a stable policy environment is crucial, as the private sector plays a key role in the national economy.
Nepal Insurance Authority opens way for coverage of Nepalis abroad
The Nepal Insurance Authority (NIA) has made provisions for insuring Nepali citizens living abroad through the “Branch Office Operation Directive 2079.” The directive allows insurers to establish branches, contact offices, or representative offices overseas. Although some Nepali insurers have expressed interest in this opportunity, they have yet to take formal steps toward setting up foreign offices.
More than 501,000 tourists visited Nepal by May 2025
As of May 2025, Nepal welcomed 501,264 foreign tourists, with 86,216 arriving in May alone. Immigration Department data shows that the total number of arrivals, including returning Nepalis, reached 194,000 in May. Of those, 108,000 were Nepalis returning from abroad. In April, tourist arrivals stood at 116,490—the highest for any April on record.
Nepal self-reliant in eggs and meat, but not milk
Nepal has achieved self-sufficiency in the production of eggs and meat but continues to fall short in milk production. As per the Economic Survey 2081/82 (2024/25) from the Ministry of Finance, the country meets domestic demand for eggs and meat. However, milk supply remains insufficient. The UN Food and Agriculture Organization recommends annual per capita consumption of 91 liters of milk, 14 kilograms of meat, and 48 eggs.
Corona insurance claims still unpaid five years later
Five years after the introduction of corona insurance during the pandemic, policyholders are still awaiting claim settlements. Introduced in Baishakh 2077 with government backing, the scheme has seen little progress in payouts. Policyholders with coverage amounts ranging from Rs 50,000 to Rs 100,000 have yet to be compensated, as the government, insurers, and the former Insurance Committee shift responsibility among themselves.
Electricity trade deal with Bangladesh faces delays
Nepal’s electricity export to Bangladesh, scheduled to begin from Ashad 1 (June 15), now faces uncertainty as Bangladesh has not initiated the necessary import procedures. The Bangladesh Power Development Board has yet to open a Letter of Credit for importing 40 MW of power this rainy season. Moreover, payment for the electricity purchased last year is still pending, raising further doubts about the agreement’s execution.
Iron industries accuse government of bias over customs hike
Iron manufacturers have criticized the government’s decision to increase customs duties on MS (Mild Steel) wire rods from 5% to 10%, arguing it unfairly benefits one specific company. According to Finance Minister Bishnu Paudel’s Economic Bill, the hike affects industries that use MS wire rods to produce iron wire mesh. These industries previously paid a 5% customs duty plus Rs 4,500 per ton in internal taxes. The revised duty has sparked concerns about favoritism and increased production costs.
Life insurance coverage hits all-time high
Life insurance coverage in Nepal has reached a historic high, according to the latest figures from the Nepal Insurance Authority. As of the end of Baishakh, 47.39% of the population is covered by life insurance. The number of active policies rose to 15,360,993, compared to 13,955,887 policies a year earlier, when coverage was at 43.56%. Some policyholders reportedly have more than one life insurance plan.
Over 729,000 labor permits issued for foreign jobs by June 3
By Jestha 20 (June 3), a total of 729,651 Nepalis had received labor permits for foreign employment in the current fiscal year. On average, 2,281 individuals secured labor permits each day. According to Foreign Employment Department Director Tikaram Dhakal, the permits include 116,817 new approvals, 311,488 through manpower agencies, 3,317 re-issuances, and 1,029 under government-to-government schemes.
Jewelry traders protest new luxury taxes in Kathmandu
Gold, silver, and diamond traders in Kathmandu protested on Sunday against the government’s newly announced luxury tax measures. The fiscal year 2082/83 (2025/26) budget introduced a 2% luxury tax on gold and silver and a 13% tax on diamonds, studded ornaments, and precious stones. Demonstrators held placards with messages like “Withdraw the 2% luxury tax on gold” and “Scrap the 13% VAT on diamonds and gemstones,” calling for laws that are friendly to consumers, workers, and artisans.
Ruling party lawmakers criticize Sudurpaschim province budget
Members of the ruling party have joined opposition voices in criticizing the Sudurpaschim Province government’s new policy and program for fiscal year 2082/083 (2025/26). In Friday’s provincial assembly debate, lawmakers said the plan overlooks the region’s specific needs and instead focuses heavily on central government projects. Nepali Congress MP and Special Rights Committee Chair Tulsi Devkota said the policy neglects provincial pride projects and lacks meaningful regional focus.
Nepalgunj Airport terminal work ahead of schedule despite delayed payments
Construction of the new terminal at Nepalgunj Airport is progressing faster than planned, even though the contractor has not received payment based on work completed. Sharma & Company Pvt. Ltd., which was awarded the contract on December 16, 2022, is building three terminal blocks—A, B, and C—along with supporting infrastructure such as aprons, parking lots, a guest house, drainage systems, footpaths, and toilets. Despite notable progress, the government has yet to release corresponding payments.
Hotel Garima Limited preparing for IPO launch
Hotel Garima Limited is gearing up to issue its Initial Public Offering (IPO). The company has partnered with NIBL Ace Capital Limited, which will serve as its corporate advisor. The capital firm will assist in IPO documentation, liaise with regulators, and support institutional development as part of the listing process.
Headrace tunnel construction begins at Upper Myagdi-1 hydropower project
Construction of the headrace tunnel outlet for the 53.5 MW Upper Myagdi-1 hydropower project has officially begun in Myagdi district. Tunnel excavation work started from the outlet point located in Bharbang, Malika Rural Municipality-7. At the inauguration event, Malika Rural Municipality Chairperson Beg Prasad Garbuja emphasized the need to mobilize adequate manpower and machinery to ensure timely completion of the project, which spans Dhawalagiri and Malika rural municipalities.
Siddhababa tunnel project reports 54 percent physical progress
Work on the Siddhababa Tunnel, a national pride project, has reached 54% physical and 48% financial completion. The tunnel breakthrough has accelerated construction, with rapid progress on invert and lining works. According to engineer Sabita Gyawali, 990 meters of invert out of 1,089 meters have been completed, and 660 meters of lining work out of 1,126 meters is done.
Farmers in Jumla begin receiving subsidized organic fertilizer
Jumla farmers have started receiving organic fertilizer at a 50% subsidy, according to Rambhakta Adhikari, Acting Chief of the Agriculture Development Office. The initiative is aimed at reducing chemical fertilizer use and boosting local agricultural output. Out of 396 available 50-kg bags, 235 have already been distributed. Due to high demand and limited supply, more stock is needed. Farmers must submit a copy of their citizenship certificate and an application to qualify.
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