KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest economic indicators present a mixed picture of Nepal’s economy, marked by cautious investor sentiment alongside resilient consumption and sectoral reforms. Weak confidence has dragged the stock market below the 2,600 level, while soaring gold prices signal a shift toward safe-haven assets amid global uncertainty.
At the same time, strong import demand for smartphones and electric vehicles, rising insurance premiums, and an oversubscribed IPO reflect sustained consumer spending and selective investor optimism. Trade growth at the Korala border and robust cardamom exports highlight emerging opportunities, though declining tea exports, stalled infrastructure projects, and material shortages expose structural bottlenecks.
Policy initiatives such as AI regulation in banking, planned public listings of state institutions, labor reforms, and infrastructure contract reissuance indicate reform momentum, but long-term stability will depend on boosting productivity, value addition, and investor confidence.
NEPSE dips below 2,600 as weak trading wipes out Rs 49 billion in value
The Nepal Stock Exchange slid 29.16 points, or 1.12 percent, over the past week to close at 2,585.87, slipping below the 2,600 mark amid subdued investor sentiment. Trading took place for four days due to a public holiday, with the index moving within a 47-point range. Most sectors ended in the red, led by life insurance, while mutual funds were the only gainers. Weekly turnover plunged by over 24 percent to Rs 14.69 billion, and market capitalization fell by Rs 49 billion, reversing gains made in the previous week.
Gold prices soar by Rs 10,900 per tola in a week amid global uncertainty
Gold prices in Nepal jumped sharply last week, rising by Rs 10,900 per tola to an all-time high of Rs 269,300. The increase followed strong gains on most trading days, despite brief midweek corrections. Market officials attribute the surge to global geopolitical tensions, a strong US dollar, and heightened investor demand for safe-haven assets ahead of the New Year. Silver prices also reached a record high, climbing by Rs 560 per tola, reinforcing bullish sentiment in precious metals.
Korala border trade crosses Rs 11 billion despite harsh winter conditions
Trade through the Korala border point has exceeded Rs 11 billion since full operations began in late September, driven largely by a surge in electric vehicle imports from China. Imports reached Rs 10.82 billion, while exports stood at nearly Rs 190 million, mostly handicrafts. More than 2,000 EVs have entered Nepal, generating over Rs 5 billion in customs revenue. Despite extreme winter temperatures in Mustang, steady cargo movement continues, supporting cross-border commerce and Nepal’s shift toward electric mobility.
Smartphone imports jump 26 percent, pushing market value to Rs 26.79 billion
Nepal’s smartphone market continues to expand as imports surged by 26 percent in the first five months of FY 2082/83. Customs data show imports worth Rs 19.3 billion, totaling more than 1.07 million units. After accounting for taxes, margins, and retail markups, the market size has reached Rs 26.79 billion. Mid-range smartphones priced between Rs 20,000 and Rs 35,000 dominate sales, reflecting growing consumer preference for feature-rich and higher-end devices across the country.
Cardamom exports rise 60 percent as tea shipments decline sharply
Nepal’s cardamom exports recorded robust growth in the first five months of FY 2025/26, increasing by over 60 percent to Rs 5.53 billion, driven by strong international demand. Export volume reached more than 2,600 metric tons. In contrast, tea exports fell by 31 percent during the same period, highlighting ongoing challenges such as pricing pressure and limited market access. The contrasting trends underline both the potential and vulnerabilities within Nepal’s agricultural export sector.
Nepal Rastra Bank unveils draft AI framework for financial sector
Nepal Rastra Bank has introduced a draft guideline to regulate the use of artificial intelligence across banks and financial institutions. The framework allows AI adoption in areas such as credit assessment, fraud detection, customer service, and compliance, while emphasizing ethical use, transparency, and data security. Institutions will be required to classify AI systems by risk and ensure board-level oversight. The central bank expects the initiative to enhance efficiency, strengthen governance, and promote inclusive financial services.
Reliance Spinning Mills IPO oversubscribed nearly 33 times
Reliance Spinning Mills’ initial public offering drew overwhelming investor interest, with applications oversubscribed almost 33 times. Nearly 584,000 investors applied for shares worth over Rs 25 billion, far exceeding the limited public allocation. As shares will be distributed through a lottery system, only around 18,500 applicants are expected to receive allotments. The strong response reflects sustained appetite for quality manufacturing stocks despite market volatility and limited supply of new listings.
Non-life insurers post double-digit premium growth after recent disruptions
Nepal’s non-life insurance sector has recorded notable recovery, with premium collections rising by more than 13 percent in the first five months of the current fiscal year. According to the regulator, 14 insurers collected nearly Rs 19.5 billion in premiums. Despite setbacks from natural disasters and civil unrest earlier, rising public awareness and demand for insurance coverage have supported growth. Most private insurers reported increased policy sales, signaling improving sector confidence.
Nepal tea industry grows steadily but export bottlenecks persist
Nepal’s tea industry has evolved into a key contributor to rural livelihoods and foreign currency earnings, particularly in Jhapa and Ilam. Supporting more than 60,000 jobs, the sector produces both orthodox and CTC teas with growing international appeal. However, most exports still pass through India as raw or semi-processed products, limiting domestic value addition. In FY 2081/82, tea exports exceeded NPR 4.59 billion against minimal imports, but experts say stronger branding, local processing, and direct third-country exports are essential to unlock higher returns and global recognition.
Tribhuvan Int’l Airport expansion slows due to material shortages and legal disputes
Expansion works at Tribhuvan International Airport have stalled for over a month following shortages of construction materials caused by legal disputes involving quarry operations in Godavari. The delays have affected runway and apron upgrades, though limited work continues. Authorities say supplies are gradually resuming but warn of possible timeline extensions. The Rs 15-billion modernization project aims to enhance capacity and facilities by 2026 to meet rising air traffic demand.
Government allows work permits for Nepali workers returning from Iraq
The government has approved the issuance of labor permits to Nepali workers returning from Iraq, easing restrictions on employment in a previously listed high-risk destination. Workers holding valid Iraqi visas and residency cards can now regularize their employment, enabling safer migration, formal remittance transfers, and access to welfare benefits. The decision is expected to reduce irregular migration and improve protection for Nepali workers abroad.
Task force proposes IPO of Rastriya Banijya Bank to deepen capital market
A government-appointed task force has recommended launching an initial public offering of Rastriya Banijya Bank to bring the state-owned lender into the public domain. As Nepal’s largest government bank, RBB has a strong capital base and consistent profitability. Floating 30 percent of its shares could raise nearly Rs. 4.7 billion. While most commercial banks are already listed, RBB’s IPO has been delayed for years. Analysts say public listing would enhance transparency, governance, and market depth.
Namo Buddha–Balthali trekking route revived to boost tourism and agro-economy
Local stakeholders in Kavrepalanchok have revived the Namo Buddha–Balthali trekking route through a heritage hike aimed at promoting tourism and agro-based livelihoods. The initiative highlighted orange farming and local culture, drawing participation from entrepreneurs and officials. Organizers plan to attract regular tourist flows during the harvest season and further develop trail infrastructure, linking trekking with agro-tourism to generate sustainable income for local communities.
Govt moves to reissue stalled infrastructure contracts after legal clearance
The government is preparing to reissue dozens of previously terminated infrastructure contracts once legal, technical, and budgetary procedures are completed. Over the past two decades, more than 66 contracts have been cancelled across multiple ministries due to prolonged delays. Officials say penalties, security adjustments, and verification of completed work must be finalized before retendering. Currently, 304 projects remain stalled under 37 agencies, mostly due to contractor inefficiency. Authorities believe reissuing contracts will help revive long-delayed projects and improve public infrastructure delivery.
Gulmi orange farmers benefit from direct sales despite lower output
Orange farmers in Gulmi have enjoyed favorable prices this season as traders purchased fruit directly from orchards, reducing marketing challenges. In Kaligandaki Rural Municipality, farmers sold oranges at competitive rates with municipal support, including subsidies for orchard development. However, overall production in the district dropped by 32 percent due to erratic rainfall, pests, and orchard management issues. Despite lower output, total sales generated over Rs. 200 million, reflecting strong market demand for Gulmi oranges.
Land subdivision allowed under power line corridors with safety conditions
The government has amended land use regulations to allow subdivision of land located under electric transmission line corridors while maintaining ownership rights. The new provision, published in November 2025, addresses long-standing restrictions that limited land transactions. Although subdivision is now permitted, construction and high-risk activities remain prohibited within safety zones. Landowners are also entitled to partial compensation based on land value. Officials say the move balances land utilization needs with transmission line safety and operational integrity.
Comment