KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic indicators present a mixed but broadly stable picture: financial markets and macro fundamentals appear strong, while public spending efficiency and governance challenges persist. The stock market’s double-digit rise and Standard Chartered Bank’s healthy dividend signal investor confidence amid ample liquidity and falling interest rates, reinforced by historically low inflation and record-high foreign exchange reserves driven by robust remittance inflows.
However, the sharp drop in inflation also reflects weak domestic demand caused by sustained outmigration, underscoring structural fragility beneath headline stability. On the fiscal side, revenue collection has improved modestly through customs and inland revenue growth, yet capital expenditure remains severely lagging, pointing to continued inefficiencies in development spending despite actions such as cancelling stalled irrigation contracts and blacklisting non-performing firms.
Meanwhile, declining gold prices, rising tourism cooperation, infrastructure plans like the wildlife flyover, and climate finance initiatives indicate gradual diversification and reform efforts, even as service disruptions such as the Jajarkot solar minigrid highlight ongoing coordination and implementation gaps at subnational levels.
NEPSE index posts double-digit rise, closes at 2,619.99 points
The Nepal Stock Exchange (NEPSE) index advanced by a strong 18.37 points on Tuesday to finish at 2,619.99 points. All sectoral indices ended in positive territory except the trading group, which slipped. Shares of 325 listed companies were traded, generating a total turnover of Rs 3.29 billion from more than 7.8 million units. Ngadi Group Power led the market in both turnover and trading volume, with transactions amounting to Rs 198.2 million. Swastik Laghubitta and Narayani Development Bank touched the upper circuit, while Swet Ganga Hydropower and Construction recorded the largest loss of the day.
Gold price drops by Rs 1,600, silver edges up
Gold prices fell sharply on Tuesday, declining by Rs 1,600 per tola to settle at Rs 259,000, according to the Federation of Nepal Gold and Silver Dealers’ Association. In contrast, silver prices increased slightly by Rs 15 to Rs 3,885 per tola. In the international market, gold is currently trading at USD 4,278 per ounce.
Nepal’s inflation falls to 22-year low at 1.11 percent
Nepal’s inflation rate declined sharply to 1.11 percent by mid-November, marking the lowest level in 22 years, according to Nepal Rastra Bank (NRB). This represents a significant drop from 5.60 percent during the same period last year. Economists attribute the decline to a weakening global economy, India’s low inflation rate of 0.71 percent combined with Nepal’s fixed exchange rate, and falling global prices of commodities such as lentils and pulses. A major contributing factor is subdued domestic demand caused by sustained outmigration, as large numbers of Nepalis leave for foreign employment or migrate to India. Food and beverage inflation dropped by 3.32 percent due to lower vegetable, spice, and pulse prices, while non-food and services inflation stood at 3.69 percent. Inflation was highest in Koshi Province at 1.80 percent and lowest in Sudurpashchim Province at 0.26 percent.
NRB reports stable economy with forex reserves at USD 21.52 billion
Nepal’s overall economic and financial conditions remain stable, supported by controlled inflation, a balanced external sector, and improved liquidity in banks, according to NRB’s report covering the first four months of fiscal year 2025/26. Foreign exchange reserves climbed to USD 21.52 billion, enough to finance imports of goods and services for 17.4 months. Remittance inflows rose by 31.4 percent year-on-year to Rs 687.13 billion. The current account recorded a surplus of Rs 279.65 billion, while the balance of payments surplus reached Rs 318.40 billion. Broad money supply expanded by 3.0 percent, deposits grew by 3.1 percent, and private sector credit increased by 1.2 percent. The average interest rate stood at 3.74 percent on deposits and 7.38 percent on loans.
Govt cancels 22 stalled irrigation contracts worth Rs 14.23 billion
The government has scrapped 22 long-delayed irrigation project contracts after contractors failed to carry out work for several years. The total value of the terminated contracts stands at Rs 14.23 billion. Among them are six contracts under the Babai Irrigation Project, 15 under the Janakpurdham Irrigation and Water Resource Management Project, and one major contract linked to the Sunkoshi Marin Diversion Multipurpose Project. The largest cancellation involved the Patel–Raman JV contract for the Sunkoshi Marin project, valued at Rs 14.8 billion including tax. The Department of Water Resources and Irrigation stated that of 215 ongoing contracts, 33 were identified as problematic, with 22 now officially cancelled following Minister Kulman Ghising’s directive to curb the practice of abandoning projects.
Capital spending at 8.03 percent, revenue collection at 78.74 percent in five months
Government performance in budget execution and revenue mobilization has remained weak during the first five months of the fiscal year. Capital expenditure amounted to only 8.03 percent of the allocated Rs 407.88 billion, totaling Rs 33.87 billion, down from 11.58 percent during the same period last year. Revenue collection reached Rs 409.78 billion, or 78.74 percent of the target set for Monday. In contrast, recurrent expenditure rose sharply, with current expenses reaching 33.39 percent (Rs 394.36 billion) and financial management costs, including debt servicing, reaching 35.32 percent (Rs 132.53 billion) of their respective allocations.
IRD collects Rs 187.67 billion during first five months
The Inland Revenue Department (IRD) collected Rs 35.13 billion in revenue in the most recent month. Cumulatively, collections from July 17 to December 15 totaled Rs 187.67 billion, or 25.45 percent of the annual target. Although monthly collections were slightly lower than last year, overall five-month revenue increased by 1.32 percent year-on-year. Non-tax revenue also showed growth, reaching Rs 24.07 billion over the same period.
NRB and IFC sign MoU to advance climate finance in Nepal
Nepal Rastra Bank and the International Finance Corporation have entered into a Memorandum of Understanding to strengthen climate finance development in Nepal. Under the agreement, IFC will offer technical support to help NRB formulate a climate finance strategy and implementation roadmap. The initiative, which will continue until September 2028, aims to build institutional capacity within NRB and the broader financial sector to manage climate-related financial risks and mobilize funding for climate adaptation initiatives.
Customs revenue grows 9.70 percent year-on-year in five months
The Customs Department collected Rs 40.19 billion in revenue between November 17 and December 15. Over the first five months of the current fiscal year, total customs revenue reached Rs 194.55 billion, accounting for 33.07 percent of the annual target. This represents a 9.70 percent increase compared to the same period last year, reflecting improved collection efficiency and higher import volumes.
Government plans Rs 7 billion wildlife-friendly flyover in Chitwan
The government has announced plans to build a two-kilometer wildlife-friendly flyover through the Tikuali forest area of Chitwan National Park under the Barandabhar Corridor. The project, estimated to cost around Rs 7 billion, aims to reduce wildlife-vehicle collisions. UNESCO and WWF had stipulated such a structure as a prerequisite for road expansion in the ecologically sensitive zone. The Asian Development Bank will provide a USD 20 million grant, with the remaining cost financed through a concessional loan. The tender process is expected to begin by February.
Eleven firms, including one Chinese company, blacklisted
The Public Procurement Monitoring Office has blacklisted 11 construction and supply companies for failing to fulfill contractual obligations. Among them is China-based Jinyu Technologies Company Limited, which was barred for three years following a recommendation from Nepal Telecom. Other firms, including Dilip Construction and New DP Nirman Sewa, received bans ranging from one to two years. Blacklisted companies are prohibited from participating in public procurement during the penalty period.
Commerce Department fines five firms for consumer law violations
The Department of Commerce, Supplies, and Consumer Protection fined five businesses Rs 10,000 each after conducting market inspections across Kathmandu. The penalized firms include Sumesh Glass Traders, Krishna Tile and Sanitary House, and Universal Home Solution. The action was taken for violations of Sections 15 and 38(d) of the Consumer Protection Act, 2018. The department noted that inspections are carried out daily, except on public holidays, to ensure fair market practices.
Ramgram Stupa draws over 15,000 foreign visitors in 2025
Ramgram Stupa in Nawalparasi West, which enshrines the original relics of Gautam Buddha, has seen a notable increase in international visitors. By November 2025, more than 15,000 foreign tourists and pilgrims from 31 countries had visited the site. The largest numbers came from Thailand, China, Myanmar, and South Korea. Local authorities are focusing on conservation and promotion efforts to establish Ramgram as a globally recognized Buddhist heritage destination.
Nepal and Korea tourism bodies sign MoU to promote travel
The Trekking Agencies’ Association of Nepal and the Korea Association of Travel Agents have signed an MoU to strengthen tourism cooperation. Under the agreement, KATA will conduct promotional campaigns to attract more Korean tourists and provide technical and informational support to TAAN. In return, efforts will be made to encourage Nepali tourists to visit Korea. TAAN President Sagar Pandey emphasized the need for more direct flights between the two countries, while assuring safety for Korean trekkers through the TIMS system.
Standard Chartered Bank announces 19 percent dividend
Standard Chartered Bank Nepal Limited has declared a 19 percent dividend during its 39th annual general meeting. The bank reported an operating profit of Rs 4.7 billion and a net profit of Rs 3 billion after tax. Standard Chartered Group holds a 70.21 percent ownership stake, while the remaining shares are held by the public.
Jajarkot solar minigrid shuts down over unpaid provincial share
Electricity supply from the 85-kilowatt solar minigrid in Thantichaur, Kushe Rural Municipality-8, Jajarkot, has been suspended after the Karnali Province Government failed to release its 10 percent contribution of Rs 5.46 million. Although AEPC covered 90 percent of the project cost, the contractor halted service after not receiving the remaining amount from the provincial Ministry of Economic Affairs and Planning. The delay has left hundreds of households without electricity.
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