KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape this week reflects a mix of cautious optimism and underlying structural strains: the stock market continued its upward run driven by banking gains despite subdued turnover, even as capital gains tax revenue plunged sharply, highlighting reduced investor activity. Government fiscal pressures remain evident with debt repayments outpacing new borrowing, while land revenue and real estate transactions also declined.
At the same time, investment and development efforts showed momentum—SSF expanded its portfolio, start-up loan demand doubled, and Nepal and Bangladesh advanced cross-border electricity trade—contrasting with persistent implementation challenges seen in delayed infrastructure projects, customs underperformance, and NAC’s mounting liabilities.
Local initiatives, from fertilizer production to community-funded bridges and municipal reforms, signal grassroots resilience, while regulatory adjustments and new currency issuance show policy attempts to stabilize and modernize the system amid a mixed economic environment.
NEPSE climbs for fourth straight session as banks drive gains
The stock market extended its upward momentum on Thursday, the week’s final trading day, with the NEPSE index advancing by 10.43 points to finish at 2,676. Over the course of the week, the index has risen by 116 points from last week’s 2,560. Although total turnover dipped slightly to Rs 6.66 billion from Wednesday’s Rs 6.69 billion, share prices of 131 companies increased. The banking sector led the rise with a 1.47 percent uptick. Four companies—Sagar Distillery, Swastik Laghubitta, Jhapa Energy, and Srinagar Agritech—hit the 10 percent positive circuit limit.
Gold dips, silver climbs in Thursday’s trading
Gold prices decreased by Rs 400 per tola in the domestic market on Thursday, while silver prices rose by Rs 60 per tola. The Federation of Nepal Gold and Silver Dealers’ Association reported fine gold trading at Rs 248,400 per tola and silver at Rs 3,280 per tola. On Wednesday, gold and silver were priced at Rs 248,800 and Rs 3,220 per tola respectively. Internationally, gold was trading at USD 4,154 per ounce and silver at USD 53 per ounce on Thursday.
SSF allocates Rs 126 billion across investment schemes
The Social Security Fund (SSF) has invested Rs 126 billion, including Rs 95 billion collected from contributors. At the 8th Social Security Day event, Executive Director Kabi Raj Adhikari noted that investments follow the Fund’s Investment Procedure: Rs 58.89 billion in fixed deposits, Rs 32.19 billion in treasury bills, and Rs 21.76 billion in development bonds. The Fund has also provided Rs 7.798 billion in loans to 20,000 members, offering special loans at 5.2 percent interest and housing/education loans at 5.86 percent.
NRB introduces new Rs 100 banknote
The Nepal Rastra Bank (NRB) announced on Thursday that a new series of the Rs 100 banknote has entered circulation. The updated note maintains the same color and dimensions as the previous version but features a Nepal map and the Ashoka Pillar in the center, along with a latent image of Mayadevi on the left. Key security elements include a two-millimeter security thread that shifts from red to green when tilted and a tactile black dot to aid the visually impaired. The note carries the signature of former governor Maha Prasad Adhikari and displays its serial number in Nepali.
Government repays more debt than it borrows
In the first four months of fiscal year 2025/26, the government repaid Rs 150.88 billion in principal and interest—exceeding the Rs 138.75 billion it borrowed. According to the Public Debt Management Office, domestic borrowing amounted to Rs 120 billion, while external loans totaled Rs 18.75 billion. The country’s total outstanding debt has now reached Rs 2.729 trillion, equivalent to 44.69 percent of GDP.
Land revenue drops 6 percent in current fiscal year
Both revenue and transaction volume from real estate activities fell by about 6 percent during the first four months of the current fiscal year compared to the same period last year. Revenue from land transactions—including registration fees and capital gains tax—reached Rs 11.91 billion by November 16, down from last year’s Rs 12.70 billion. Capital gains tax alone declined by Rs 50 million to Rs 4.44 billion due to fewer property transactions.
Start-up loan requests double to 10,244
Interest in start-up enterprise loans has surged, with 10,244 applications filed for FY 2025/26—twice as many as the previous year—according to the Industrial Business Institute. Executive Director Umesh Gupta stated that with only Rs 730 million available, the Institute expects to fund between 400 and 550 entrepreneurs. Approved applicants will receive collateral-free loans ranging from Rs 500,000 to Rs 2 million at a concessional 3 percent interest rate. Last year, 600 applicants received Rs 886.6 million in funding.
NAC still owes Rs 1 billion for narrow–body engine overhaul
Nepal Airlines Corporation (NAC) has yet to clear roughly Rs 1 billion—about 52 percent—of the Rs 2.10 billion owed to Israel Aerospace Industries (IAI) for engine repairs and leased engines. On Monday, General Manager Amrit Man Shrestha paid Rs 303.6 million, bringing total payments to around Rs 1.3 billion. The overdue bill covers two overhauled engines and one leased engine. IAI has warned of canceling the lease and seeking legal action internationally if payments are not completed promptly.
Nepal and Bangladesh agree on 20 MW expansion in power trade
Nepal and Bangladesh have decided to boost electricity trade by an additional 20 MW, raising total exports to 60 MW. The decision was made during the 7th Joint Steering Committee meeting of energy secretaries in Dhaka on Thursday. Bangladesh also agreed to form an expert team to assess the Sunkoshi III Hydropower Project and move forward with investment procedures, including finalizing a Joint Venture Agreement. Both nations also committed to working together to obtain India’s approval for a trilateral energy cooperation MoU.
Cooperatives allowed to reduce non-banking asset loss provision
The National Cooperative Regulatory Authority has revised its regulatory framework to allow Savings and Credit Cooperatives to maintain only a 50 percent loss provision on foreclosed non-banking assets—down from the previous 100 percent requirement. This relief applies only once to assets foreclosed before July 16, the end of the last fiscal year. However, cooperatives that do not meet the full provision requirement will be prohibited from distributing dividends or bonuses. Those holding more than Rs 10 million in non-banking assets must also submit a time-bound sales plan.
Service sector dominates Gandaki province economy
The service industry continues to heavily influence Gandaki Province’s economy, accounting for 55.8 percent of its GDP in FY 2024/25. Agriculture contributed 27 percent, while the industrial sector made up 16 percent, according to an annual economic activity report by Nepal Rastra Bank. The study highlighted strong tourism growth, with foreign arrivals rising nearly 26 percent to 69,491, though direct employment in tourism dipped slightly by 1.1 percent.
PPMO demands final clarification from 14 contractors
The Public Procurement Monitoring Office (PPMO) has issued a final seven-day notice to 14 contractors recommended for blacklisting due to poor performance. Despite an earlier 30-day notice, the firms—such as Lab Kush Construction, Manakamana Construction, and Deepshree Engineering—did not provide adequate clarification. The PPMO warned that failure to respond within the extended deadline will result in punitive action.
Koshi province bridge construction faces severe delays
Most of the 24 bridge projects underway in Koshi Province—worth over Rs 4.625 billion—are progressing very slowly. Although Rs 1.589 billion has already been disbursed, overall physical progress remains poor. Among nine major strategic bridges, financial progress stands at only Rs 15.2 million out of a contract value of Rs 769.8 million. The Deumai Khola and Bansilaghat bridges are among the slowest, each only 9 percent complete. Contractors have attributed delays to difficult terrain and disruptions during the Covid period.
Kathmandu Deputy Mayor directs infrastructure assessment
Kathmandu Metropolitan City Deputy Mayor and Monitoring Committee Coordinator Sunita Dangol has instructed the concerned departments to conduct a detailed assessment of existing infrastructure before planning new projects, with a focus on incorporating water recharge systems. She issued the directive while inspecting the Rs 35.1 million stone-paving project in the Jamal–Kamalachhi–Aasan corridor. Although the initial plan favored a water-recharge-friendly paving approach, tests later found it unsuitable for heavy traffic. The revised version of the project, which began on July 8, 2024, is now expected to finish later than originally scheduled.
Sarangkot forest group begins organic fertilizer production
The Thotne Khola Community Forest User Group in Sarangkot, Pokhara Metropolitan-18, has begun producing organic fertilizer using collected leaf litter and undergrowth from the forest. Chairperson Dinesh Shrestha said the initiative is designed to enhance soil quality and create green employment through sustainable resource use. The group has already produced and sold 35,000 kilograms of fertilizer through the Thotne Khola Agricultural Cooperative, initially earning Rs 13,000. Organic fertilizer is priced at Rs 25 per kg, while vermicompost sells for Rs 40 per kg.
Kanchanpur customs falls short of revenue target
The Kanchanpur Customs Office at Gaddachauki collected Rs 206,802 during the first four months of FY 2025/26, missing its target of Rs 262,096. According to Information Officer Chakra Dev Bhatta, revenue fell short because of government tax concessions on imported items and restrictions on vehicles over 10 tonnes crossing the Mahakali Bridge. This marks the fifth consecutive year the office has not met its goal; it achieved only 81 percent of its target in FY 2024/25.
Gurja residents raise Rs 1 million for bridge construction
Residents of Gurja, a remote village in Dhaulagiri Rural Municipality-1, Myagdi, have raised Rs 1 million to help build a Bailey bridge over the Kamjakhani River along the under-construction Lulang–Gurja road. Gurja Society Kathmandu Chairperson Lilmaya Chhantyal said the amount was collected through cultural programs. Ward Chairperson Jhak Bahadur Chhantyal explained that although all levels of government allocated funds for the road, local contributions were needed to construct the bridge due to budget shortages. The community aims to bring the road to Gurja within a year.
Pappu–Mahadev JV loses Kankai bridge contract after long delays
The contract for the 723-meter Kankai bridge on the Hulaki Highway—linking Jhapa and Gauriganj Rural Municipalities—has been terminated after 14 years of stalled progress. The Hulaki Highway Directorate Office in Itahari revoked the agreement with the Pappu–Mahadev Khimti JV. Signed on June 14, 2011, the contract was due for completion by June 13, 2013. Despite five deadline extensions, just 56 percent of the work was completed. The contract was worth Rs 340.9 million, and the Rs 17.1 million performance guarantee will now be confiscated. The decision followed an unsatisfactory explanation from the contractor and no commitment to resume work.
Udayapur Cement restarts operations after eight-month shutdown
State-owned Udayapur Cement Industries has resumed production after remaining fully closed for eight months following the government’s April 28 decision to privatize it. General Manager Kobid Kafle said the country’s largest cement producer was revived with support from both workers and the current administration. To ensure stable operations and gradually settle its debts, the industry has requested a Rs 240 million government loan, promising repayment with interest within three years. The factory employs 193 permanent staff and has the capacity to produce 800 metric tons of clinker per day.
Capital gains tax from stock market plunges 58 percent
Government revenue from Capital Gains Tax (CGT) on stock market transactions dropped by 58.54 percent to Rs 3.383 billion in the first four months of the current fiscal year, compared with Rs 8.13 billion collected during the same period last year. CDS and Clearing (CDSC) attributed the decline to market volatility and reduced trading activity, with political instability contributing to investor caution. Between October 18 and November 16 alone, CGT collection reached Rs 380.5 million, with short-term traders contributing the highest share at over Rs 163.5 million.
Sunil Bhakta Shrestha elected to lead Nepal–Vietnam Chamber
Entrepreneur Sunil Bhakta Shrestha has been elected president of the Nepal–Vietnam Chamber of Commerce and Industry during its 14th General Assembly held on Wednesday. The newly formed executive team includes Senior Vice Presidents Deepak Kumar Malhotra and Urmila Shrestha. President Shrestha pledged to strengthen bilateral trade and investment, noting the significant potential to expand current trade volumes. Vietnam’s Honorary Consul General to Nepal, Rajesh Kaji Shrestha, emphasized the importance of establishing direct flights to support the growing market for Nepali goods.
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