KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic outlook appears strained as multiple indicators suggest weakening fundamentals and emerging structural challenges. The World Bank’s sharp downward revision of the 2026 growth forecast to 2.1% signals mounting macroeconomic concerns, while the post-Dashain share market slump and record-high gold prices point to eroding investor confidence and rising preference for safe-haven assets.
The central bank’s liquidity mop-up and growing power exports highlight mixed trends—an oversupplied banking sector but also gains in the energy trade. Meanwhile, Nepal’s rapid shift toward digital payments and rising retail investor participation through platforms like “Mero Share” reflect ongoing financial modernization.
However, persistent power outages, flood damage to hydropower projects and industries, delays in infrastructure projects like the Nagdhunga Tunnel, and uncertain investment summits underline governance and climate vulnerabilities. Despite these challenges, the government’s push to privatize loss-making enterprises and launch MCC-funded infrastructure offers potential pathways for long-term reform and recovery.
World Bank lowers Nepal’s 2026 growth forecast to 2.1%
The World Bank has downgraded Nepal’s projected economic growth for 2026 to 2.1%, down from its earlier estimate of 2.9%. The revised forecast was released on Tuesday, reflecting a decline of 0.8 percentage points. For 2025, Nepal’s growth is projected at 4.6%, and the World Bank anticipates a recovery to 4.7% in 2027.
Share market falls after Dashain, NEPSE down by 58.55 points
The Nepal Stock Exchange (NEPSE) experienced a sharp drop on its first trading day after the Dashain holidays, with the index falling by 58.55 points (2.19%) to close at 2,604. Daily turnover stood at Rs 4.62 billion. Among the listed companies, only 16 gained while 235 declined and one remained unchanged. Every sector posted losses, with the “Others” group suffering the most at a 4.83% decline due largely to Nepal Reinsurance’s slump.
Gold hits all-time high of Rs 235,400 per tola
Gold prices surged by Rs 2,300 on Tuesday, reaching a new record high of Rs 235,400 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Associations. This is up from Rs 233,100 the previous day. Meanwhile, silver prices remained unchanged.
NRB pulls Rs 90 billion from banking system amid rising liquidity
With liquidity continuing to rise in the banking sector, Nepal Rastra Bank (NRB) withdrew Rs 90 billion from circulation on Tuesday. The amount was pulled using a 12-day deposit collection tool. The central bank has been absorbing excess liquidity regularly on Sundays and Wednesdays but paused last week due to the Dashain holidays.
Nepal exporting 1,000 megawatts of surplus power daily
The Nepal Electricity Authority (NEA) has announced it is exporting an average of 1,000 megawatts of surplus electricity each day. Since mid-July, electricity exports have generated revenue of around Rs 15 billion. The power is being sold to the Indian states of Haryana and Bihar under medium-term bilateral agreements at competitive rates.
Urban Nepal going cashless as digital payments dominate
Most urban transactions in Nepal have shifted to digital platforms. From small purchases worth Rs 10 to large-scale government payments, cashless methods are being widely adopted. According to the Office of the Auditor General, 99% of government payments—excluding water, telecom, and electricity—are now done through electronic fund transfers (EFT).
Government advances plan to privatize loss-making public firms
The government is pushing forward with the privatization of failing state-owned enterprises. Even before the current administration took office, the Ministry of Finance had begun preparations for due diligence audits (DDA) of seven struggling institutions. Consultant shortlists have been prepared for DDAs of Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Metal Company, and Nepal Orient Magnesite.
MCC-funded cross-border power line project to start in October
Construction of the 400 kV, 18 km-long New Butwal–India transmission line, funded by the Millennium Challenge Corporation (MCC), will commence this month. The project contractor, Transrail Lighting Limited, is set to begin foundation work for transmission towers. The $12.36 million contract was signed on August 30, 2024, with Millennium Challenge Account (MCA) Nepal overseeing implementation.
“Mero Share” users cross 6.1 million, digital investors rise sharply
The number of “Mero Share” accounts has risen significantly to 6.18 million, up from just over 742,000 in 2019/20. Similarly, beneficiary (DEMAT) accounts now exceed 7.1 million. Online user logins have jumped from 35,000 in 2019/20 to more than 2.6 million in the current fiscal year.
Floods impact 32 hydropower projects across three provinces
Heavy rainfall from October 3 to 5 affected 32 hydropower projects in ten districts across three provinces. According to the Independent Power Producers’ Association Nepal (IPPAN), 17 operating projects with a combined capacity of 180 megawatts and 15 under-construction projects totaling 338 megawatts suffered damage due to flooding.
Minister Ghising urges NEA to fix frequent power outages
Energy Minister Kulman Ghising has directed Nepal Electricity Authority (NEA) to resolve the problem of frequent power cuts. During an inspection at the Load Dispatch Center in Syuchatar on Monday evening, he emphasized the need to address public complaints about unreliable electricity supply across the country.
Damage assessment begins in Morang–Sunsari industrial corridor
Post-flood assessments have begun in the Morang–Sunsari Industrial Corridor, where multiple industries were inundated. Industry associations started inspections on Monday to assess losses. Around two dozen businesses in Sunsari–Morang and Katahari Rural Municipality of Morang are reported to have sustained significant flood-related damage.
Sudurpaschim investment summit likely to be postponed
The Sudurpaschim provincial government’s plan to host an investment and development summit on November 16–17 is now uncertain. Following extensive damage to provincial infrastructure during the Gen-Z protests on September 8–9, officials say the summit may be postponed beyond November.
Nagdhunga tunnel contractor demands Rs 3 billion in compensation
Japanese firm Hazama Ando Corporation, responsible for constructing the Nagdhunga Tunnel, has demanded around Rs 3 billion in compensation after failing to complete the project on schedule. The original project agreement was valued at Rs 13.5 billion. The government has not agreed to the compensation demand. A three-member independent dispute resolution committee is currently reviewing the case, and both parties are required to accept its verdict.
Gold price surges by Rs 72,100 per tola in a year
Gold prices have risen sharply over the past year, increasing by Rs 72,100 per tola — a 44.72% surge. This marks the highest recorded level. Experts say the trend could continue, with some forecasting gold to hit USD 4,000 per ounce, up from the current USD 3,935.
Surya Jyoti Life contributes Rs 15 million to rebuilding fund
Surya Jyoti Life Insurance Company has donated Rs 15 million to the government’s “Physical Infrastructure Reconstruction Fund.” The donation was made in response to the destruction of public and government properties during violent protests on September 7 and 8. CEO Prakash Bikram Khatri handed the cheque to Finance Minister Rameswor Khanal on Tuesday.
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