KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The developments collectively portray an economy facing short-term pressures alongside structural reforms and selective investment momentum. Financial markets reflected cautious sentiment, with the NEPSE declining on weak turnover even as gold and silver surged to record highs, signaling investor preference for safe assets amid global uncertainty.
Public finance challenges remain pronounced, highlighted by rising revenue arrears, weak provincial budget execution in Karnali, and ballooning overdue debt of public enterprises—particularly the Nepal Electricity Authority—underscoring governance and efficiency gaps. At the same time, regulatory tightening in cooperative banking and real estate, steady growth in Social Security Fund contributions, and dividend announcements point to gradual institutional strengthening in the financial sector.
Infrastructure and investment narratives were mixed: while large projects such as the Siddhababa Tunnel, Kanti Highway repairs, and an MCC-funded road contract show continued capital commitment and growing domestic capacity, delays, legal disputes, and administrative transitions in aviation reveal persistent implementation risks. Overall, the picture is one of cautious economic management, with reform efforts and investment potential advancing amid fiscal stress, policy uncertainty, and governance challenges.
NEPSE sheds 13.88 points
The Nepal Stock Exchange index declined by 13.88 points on Monday to settle at 2,581.21. Total turnover slipped to Rs 3.51 billion from Rs 4.52 billion in the previous session. Share prices advanced for 54 companies, dropped for 200, and remained unchanged for five. All sector indices ended in the red except trading. Losses were led by life insurance (down 1.01 percent), hotels and tourism (1.26 percent), and hydropower (0.66 percent). Lumbini Bikas Bank, Sun Nepal Life, Manjushree Finance, Himalayan Power Partner, and Citizen Life recorded the highest turnover. SY Panel emerged as the top gainer, while Manushi Laghubitta suffered the sharpest decline.
Gold and silver prices set new records
Gold and silver prices surged to historic highs on Monday. Gold rose by Rs 3,400 to reach a record Rs 261,700 per tola, while silver climbed by Rs 130 to Rs 4,235 per tola. The rally mirrors international markets, where gold traded above USD 4,398 per ounce and silver touched USD 69.36 per ounce, driven by global economic uncertainty and strong investor demand.
Revenue arrears climb to Rs 275.5 billion
Outstanding revenue disputes between taxpayers and the government have pushed total arrears to Rs 275.5 billion by the end of the last fiscal year. The Inland Revenue Department reported that more than 330,000 taxpayers owe Rs 94.95 billion, while another Rs 180 billion remains locked in court cases and appeals. Income tax disputes dominate the arrears, amounting to Rs 219.11 billion. The department collected only Rs 8.71 billion against a target of Rs 22.76 billion, underscoring persistent challenges in resolving tax cases through the judicial process.
Nepali joint venture secures USD 20 million MCC road contract
MCA-Nepal has awarded the Dhankhola–Lamahi road recycling project to Sharma-Kumar JV in a contract valued at USD 20 million, excluding VAT. The project involves upgrading a 40-kilometer stretch using Full Depth Reclamation technology and marks the first MCC contract won by a fully Nepali joint venture. Funded under the MCC compact, construction is expected to be completed within 24 months.
NRB introduces new directive, sets Rs 2.5 billion capital requirement
Nepal Rastra Bank has fixed a minimum paid-up capital threshold of Rs 2.5 billion for cooperative banks under the Cooperative Bank Directive, 2025. The directive requires banks to maintain primary capital of at least 4 percent and total capital of 8 percent based on risk-weighted assets. A four-level penalty framework has been introduced, with provisions for license cancellation if capital shortages exceed 75 percent. NRB has also unveiled a separate integrated directive for the National Cooperative Bank, covering governance, risk management, reporting, and other key areas, establishing the first comprehensive regulatory framework for cooperative banks.
SSF collections reach Rs 97.57 billion
The Social Security Fund has accumulated Rs 97.57 billion from approximately 2.6 million workers across different sectors. Of the total, Rs 18.4 billion has been disbursed as benefits, including Rs 14.885 billion for old-age security. Around 2 million migrant workers are currently enrolled in the fund. Under the contribution scheme, employers deposit 20 percent and employees 11 percent of basic salary. Over the past year, the SSF paid out Rs 5.9 million in claims, while contributors with at least 36 months of payments are eligible for special loans of up to 80 percent of their savings.
Overdue debt of public enterprises soars to Rs 408 billion
Nepal’s public enterprises are facing mounting financial stress, with overdue debt rising sharply to Rs 408 billion in fiscal year 2024/25, compared to Rs 92 billion four years earlier. According to the Public Debt Management Office, of the government’s total investment of Rs 930 billion, loans account for Rs 526 billion. The Nepal Electricity Authority alone contributes nearly 70 percent of total defaults, with Rs 278 billion in unpaid principal and interest. Analysts attribute the worsening situation to political interference and weak institutional management.
198 firms seek licenses as real estate rules tighten
After the government enforced mandatory licensing, 198 companies have applied for approval to conduct real estate transactions exceeding Rs 30 million. The Ministry of Land Management required firms operating in metropolitan and sub-metropolitan areas to register by December 13. License fees range from Rs 500,000 to Rs 1 million, depending on transaction size. While the Nepal Land and Housing Developers’ Federation welcomed the move for greater transparency, its president Bishnu Ghimire criticized the exclusion of individual-to-individual transactions, which remain outside regulatory oversight.
Minister Ghising reviews Rs 7.34 billion Siddhababa tunnel project
Minister for Physical Infrastructure and Transport Kulman Ghising inspected the Siddhababa Tunnel project on the Siddhartha Highway, where physical progress has reached 65 percent. The Rs 7.342 billion project, being implemented under an EPC model by China State Construction Engineering Corporation, aims to bypass landslide-prone sections in Palpa. The minister instructed authorities to promptly address the contractor’s request for a 19-month deadline extension to prevent further delays. The 1,126-metre main tunnel is scheduled for completion by April 2027 with government funding.
NICCI seminar highlights USD 747 million investment potential
The Nepal-India Chamber of Commerce and Industry held its 31st annual general meeting, focusing on policy reforms to attract Indian investment. Former ADB vice president Dr Bindu Nath Lohani urged the government to shift from a “gatekeeper” role to that of a development partner. Discussions highlighted cross-border electricity trade, with NEA Managing Director Hitendra Dev Shakya affirming private sector participation. The seminar also noted USD 747 million in joint investments under MCC and government funding. Finance Minister Rameshore Prasad Khanal encouraged businesses to expand market access to deepen bilateral economic cooperation.
Private sector voices concern over plan to release rioters
Business leaders have raised strong objections to the government’s plan to withdraw cases against individuals involved in looting and arson during the Gen Z protests. Following cabinet approval of an agreement with protest representatives on December 11, the government announced it would drop charges against those not linked to organized crime. Leaders of FNCCI and CNI warned that such a move could foster impunity and deter investment. Telecom company Ncell reported losses of Rs 600 million from attacks on its facilities, stressing that the incidents were criminal acts requiring accountability.
Nabil Bank wins USD 7.4 million counter-guarantee case in China
Nabil Bank has secured a favorable ruling from the Chongqing Higher People’s Court in a counter-guarantee dispute involving USD 7.4 million linked to the Trishuli 3B Hydropower Project. The case stemmed from the project developer’s termination of its contract with China’s Shuifa ANHE Group in December 2023 due to construction delays. Although China Everbright Bank initially refused payment following an injunction, Nabil Bank had already honored the guarantee. The court’s final verdict on September 23 dismissed the appeal, marking a significant international legal win for Nepal’s banking sector.
Interim chiefs named at TIA and CAAN following graft cases
The Ministry of Culture, Tourism, and Civil Aviation has appointed Teknath Sitaula as acting general manager of Tribhuvan International Airport after corruption charges were filed against former chief Hansraj Pandey over the Pokhara International Airport project. Likewise, Dev Chandra Lal Karna has been named acting director general of the Civil Aviation Authority of Nepal after incumbent Pradip Adhikari was legally indicted. The appointments are intended to maintain administrative continuity in the country’s key aviation institutions.
Bad weather shuts three domestic airports
Dense fog and adverse weather conditions have forced the temporary closure of Bhairahawa, Janakpur, and Simara airports in the Terai. While Dhangadhi Airport has resumed operations, many regional airports remain closed during morning hours, reopening later in the day as visibility improves. Flight operations at Tribhuvan International Airport in Kathmandu remain unaffected. Passengers have been advised to regularly check flight schedules as winter weather continues to disrupt domestic air services.
Rs 2.7 billion allocated for Kanti Highway flood repairs
Reconstruction of the flood-damaged Kanti Highway has begun following severe destruction during the September–October 2024 floods. Contracts worth more than Rs 2.7 billion have been awarded for slope stabilization, road repair, and bridge construction. Major works include Rs 1.33 billion for the Tika Bhairav–Baguwa section and Rs 740 million for the Baguwa–Hetauda stretch, along with a Rs 180 million permanent bridge at Baguwa. The project aims to complete major upgrades before the next monsoon.
US-based firm introduces collateral-free student loans up to USD 100,000
American lender MPOWER Financing has launched unsecured education loans of up to USD 100,000 for Nepali postgraduate students, marking a first for the country. Associate Director Claire Almand said the scheme targets STEM and MBA students admitted to 500 leading universities in the US and Canada. Loan eligibility is assessed through a data-based model focused on career prospects rather than guarantors. The loans carry fixed interest rates over a 10-year term, with a fully digital application process.
Karnali posts weak budget spending at 2.85 percent
Karnali Province has recorded budget expenditure of just Rs 941.6 million between November 17 and December 15, amounting to only 2.85 percent of its total allocation. Out of an annual budget of Rs 32.99 billion, only 9.87 percent has been spent in the first five months of fiscal year 2025/26. Capital spending remains particularly low at 4.36 percent, with the Ministry of Physical Infrastructure utilizing only 5.64 percent of its budget. Officials cited Gen Z protests and administrative delays as key reasons for the sluggish performance.
Local governments asked to submit proposals for federal grants
The Ministry of Federal Affairs and General Administration has urged all 753 local units to submit project proposals for federal equalization and special grants for fiscal year 2026/27. Proposals must be filed through the National Planning Commission’s electronic system by February 12, 2026. Officials said the timeline aligns with constitutional budget deadlines, allowing local and provincial governments to finalize their budgets on schedule.
Orange festival aims to generate Rs 100 million in trade
The second Orange Festival and Food Festival 2025 will begin this Friday in Chitwan with the goal of promoting local produce and domestic tourism. Organizers estimate that orange farming in the region generates annual trade worth Rs 90–100 million. The five-day event will feature more than 50 stalls and benefit around 100 farmers, with technical and irrigation support provided by local authorities.
Rs 175.6 million municipal hospital opened in Madhyabindu
A new 15-bed municipal hospital building has been inaugurated in Chormara, Nawalpur, at a cost of Rs 175.6 million. Opened by Mayor Bhimlal Adhikari, the facility has been upgraded from a primary health center into a two-story structure with 42 rooms, including operation theaters, laboratories, and specialist wards. Located near the East-West Highway, the hospital will provide emergency trauma services and serve surrounding municipalities and parts of Palpa.
Citizen Investment Trust announces 13 percent dividend
The Citizen Investment Trust has declared a 13 percent dividend from last fiscal year’s profits, comprising 5 percent bonus shares and 8 percent cash. The proposal, approved by the board, will be implemented after endorsement by the annual general meeting. With paid-up capital of Rs 6.48 billion, the total payout amounts to about Rs 841.3 million.
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