KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The week’s economic developments highlight a mixed but cautiously optimistic picture for Nepal’s market and broader economy. Despite the share market dropping 2.01% and gold and silver prices declining after recent highs, the market still surpassed last year’s peak, indicating underlying resilience.
Rising gold prices have notably reduced imports, affecting revenue, while Nepal Rastra Bank’s introduction of a regulatory sandbox signals a push toward financial innovation. Meanwhile, rising loan interest rates reflect Nepal’s improving income levels, which influence borrowing costs.
Key policy shifts include calls for simpler insurance language to build public trust, plans to remove mandatory life insurance for migrant workers, and the drafting of a budget discipline bill amid procedural controversies.
Export growth is seen in record yarn exports, and significant government loans have been approved for infrastructure projects, including a Japanese grant for highway repair.
Challenges persist with sharply reduced paddy planting in Madhesh and local protests over coal imports, even as infrastructure improvements and industrial estate revitalization efforts continue. Overall, these trends reflect Nepal’s ongoing balancing act between growth, regulation, and social concerns.
Share market drops 2.01% this week, down 60 points
This week, the share market slid by 2.01 percent, shedding 60 points. The benchmark declined from 2,982 last week to 2,922. Despite the fall, the market still eclipsed last year’s peak after hitting 3,002 on Tuesday. That high had previously been reached on August 15 of last year, when the market briefly touched 3,000, with the all-time high set at 3,198 on August 18, 2021. Over five trading sessions this week, losses occurred on three days and gains on two.
Gold and silver prices decline again on Friday
Gold prices fell by Rs 500 per tola on Friday, bringing the rate to Rs 193,100, according to the Federation of Nepal Gold and Silver Dealers’ Association. Over two days, the price has dropped by Rs 1,300. On Tuesday, gold was at Rs 194,400 before falling to Rs 193,600 on Wednesday. Silver prices also dipped by Rs 35 per tola.
Soaring gold prices sharply cut imports
Rising domestic gold prices have caused a significant drop in gold imports and associated revenues. According to the Nepal Gold and Silver Dealers’ Association, the price per tola has surged from Rs 92,400 in fiscal 2018/19 to Rs 193,600—a rise of Rs 102,000.
NRB drafts regulatory sandbox for e finance innovation
Nepal Rastra Bank (NRB) has unveiled a policy framework allowing institutions to pilot new electronic financial products. The central bank has introduced a “sandbox” model for testing digital finance applications and software. The draft regulatory framework has been released for public consultation, and feedback is being solicited from relevant stakeholders.
Loan interest rates rise as Nepal’s income climbs
As Nepal’s per-capita national income improves, borrowing costs from international institutions have increased. The Ministry of Finance reports that loan rates from entities like the World Bank, ADB, and development financing partners such as China, Japan, and India are now higher due to adjustments based on income level and repayment capacity.
Stakeholders call for simplified Nepali insurance policies
Insurance advocates are urging companies to issue policy documents in clear Nepali language to build public trust. They emphasize that all insurance terms should be explained in understandable terms at the time of purchase and recommend a guaranteed payout percentage after damage surveys are completed.
Nepal exports yarn worth Rs 14.39 billion
Nepal achieved record yarn exports of Rs 14.39 billion in fiscal year 2024/25. This marks a 19.85 percent increase over the previous year’s exports of Rs 12.01 billion, according to the Trade and Export Promotion Centre, and highlights growing demand for Nepalese high-value yarn.
Finance Ministry drafts budget discipline bill without cabinet approval
Despite legal requirements, the Ministry of Finance has begun drafting legislation to enforce budget discipline without prior approval from the Council of Ministers. A task force has been formed and drafting has commenced, with Finance Secretary Ghanshyam Upadhyay stating that they are pursuing both drafting and cabinet approval simultaneously.
Mandatory life insurance for migrant workers to be removed
The government plans to eliminate the requirement for term life insurance for workers going abroad under the proposed amendment to the Foreign Employment Act, 2007. If approved by the Ministry of Law, migrant workers will no longer need to renew life insurance every two years.
Govt approves nearly Rs 49 billion in project loans
Recent cabinet meetings approved nearly Rs 48.96 billion in new loans. On July 23, Rs 13.3 billion (about USD 100 million) was approved for the SASEC Electricity Transmission and Distribution Project via the OPEC Fund. On July 28, another Rs 35.66 billion was approved for two additional initiatives.
New tourism policy lauded as industry friendly
Private sector groups have praised the government’s new tourism policy, the first in 17 years, as private-sector oriented. The policy promotes private investment, multi-purpose infrastructure, institutional capacity building, and partnerships to develop quality tourism offerings.
Paddy planting in Madhesh plunges sharply this year
By July 31, only 51 percent of paddy fields in Madhesh Province had been planted compared to 90 percent a year earlier. Out of 373,645 hectares, only 193,116 had been sown, the Ministry of Agriculture and Livestock Development reported, citing unfavorable weather as the main cause.
Coal imports continue at Sirsiya dry port despite local protests
Large amounts of coal continue to be imported through the Sirsiya Dry Port, despite ongoing opposition from local residents. A sizable coal pile has formed on the western side of the port. Residents of nearby Khalwatola have long voiced concerns over pollution caused by the coal shipments. Coal imports through the port began last year.
Insurance authority penalizes 32 companies
The Nepal Insurance Authority has imposed penalties on 32 firms—including general, life, micro-insurance, and re-insurers—for non compliance with financial reporting requirements and approval conditions.
Sudurpashchim Province blacktops 106 km of roads in one year
The Ministry of Physical Infrastructure Development in Sudurpashchim Province blacktopped 106 kilometers of roads in fiscal year 2024/25, according to a report submitted to the Office of the Chief Minister and Council of Ministers. The ministry also reported graveling 103 kilometers and constructing 147 kilometers of earthen roads through its infrastructure development offices.
Efforts underway to revive Gajendra Narayan Singh Industrial Estate
The long-neglected Gajendra Narayan Singh Industrial Estate is now the focus of revitalization efforts. Local political leaders, the provincial government, and police are collaborating to transform Rupani into an industrial hub. The estate management has begun offering affordable land leases, round-the-clock electricity, water as needed, and full security to attract businesses from other regions.
Nepal accepts ¥2.8 billion Japanese grant for BP Highway repairs
The government of Nepal has approved acceptance of a Japanese grant worth 2.8 billion yen for emergency repairs to the BP Highway, which sustained flood damage last year. The decision was taken during the Cabinet meeting held on June 23.
Ncell rolls out ‘Biz Sadhai On’ monsoon offer for businesses
Ncell has launched a special monsoon offer called “Biz Sadhai On” for postpaid, SME, and corporate users. The deal offers 12 months of service at the cost of 10 months under the Biz Sadhai On 399 and 649 plans. The offer aims to provide cost savings to businesses throughout the year.
Rolpa sees Rs 160 million boost in cottage and small industries
Cottage and small industries in Rolpa received an additional Rs 160 million in investment during fiscal year 2024/25, according to the local office of the Cottage and Small Industries. Of the total, Rs 102.27 million went into industry, while Rs 57.65 million was invested in commerce. Revenue collection during the period stood at Rs 3.22 million.
Khanikhola Hydropower to issue 100% rights shares from August 19
Khanikhola Hydropower Company Limited will begin issuing 100% rights shares starting August 19. Existing shareholders will be entitled to one new share for every share they currently hold, as part of the company’s plan to raise additional capital.
PM Oli urges public to consume and promote millet
Prime Minister KP Sharma Oli, marking the start of National Millet Day on Shrawan 16, has urged citizens to increase both consumption and production of millet dishes to support agricultural diversity and nutritional health.
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