KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Overall, the developments reflect a mixed but cautious economic outlook for Nepal, marked by short-term market volatility, structural external imbalances, and ongoing institutional interventions. The decline in the NEPSE index alongside high turnover suggests active trading amid uncertainty rather than a loss of investor participation, while the drop in gold prices after a record high and rising silver prices point to shifting investment preferences.
Macroeconomically, the widening trade deficit with China and the growing foreign currency outflow for overseas education underscore persistent pressures on Nepal’s balance of payments, driven by weak export competitiveness and limited domestic opportunities. In response, authorities are actively managing liquidity through NRB’s bond issuance, strengthening revenue collection via policing and customs reforms, and enforcing accountability through blacklisting contractors and penalizing consumer law violations.
At the same time, progress in large infrastructure projects like the Tanahu Hydropower Project and operational maintenance in aviation signal continued efforts to build long-term productive capacity, even as delays and governance challenges remain key constraints.
NEPSE falls 10.53 points as daily turnover reaches Rs 4.77 billion
After a strong gain at the start of the week, the Nepal Stock Exchange (NEPSE) index slipped into negative territory on the second trading day. On Monday, the benchmark index dropped by 10.53 points to close at 2,622.88. A total of 10,037,307 shares of 337 listed companies were traded through 69,548 transactions, generating a turnover of Rs 4.774 billion. All sectoral indices declined except development banks and mutual funds. SY Panel Nepal hit the upper circuit, while Win Nepal Laghubitta Bittiya Sanstha touched the lower circuit. SY Panel Nepal posted the highest turnover at Rs 230.2 million, and Ngadi Group Power recorded the highest trading volume with 302,900 shares.
Gold price falls while silver gains on Monday
Gold prices declined slightly on Monday after reaching a record high the previous day. Following a Rs 1,300 rise on Sunday, gold fell by Rs 600 to trade at Rs 270,000 per tola. On Sunday, the price stood at Rs 270,600 per tola. In contrast, silver prices increased by Rs 60 per tola, rising from Rs 4,835 to Rs 4,895. In the international market, gold is currently trading at USD 4,514 per ounce.
Nepal records Rs 163.73 billion trade deficit with China
Nepal’s trade gap with China has widened sharply, with imports exceeding exports by 351 times during the first five months (July 17 to December 15) of fiscal year 2025/26. Data from the Department of Customs show imports worth Rs 163.73 billion against exports of just Rs 460 million. The Nepal Trans Himalaya Border Commerce Association blamed restrictive Chinese trade policies rather than infrastructure constraints. Even after the opening of Korala and Rasuwagadhi border points, Nepali goods have struggled to access the Chinese market. Analysts recommend pursuing zero-tariff access and encouraging Chinese investment in domestic production to reduce the deficit.
NRB to withdraw Rs 25 billion from the market
Nepal Rastra Bank (NRB) is withdrawing Rs 25 billion from the banking system on Monday by issuing the “Nepal Rastra Bank Bond 2025 ‘A’” to absorb excess liquidity. According to the central bank’s notice, the bond’s interest rate will be fixed through bidding scheduled for 2:00 PM, with interest payments made semiannually. Participation is limited to Class A, B, and C financial institutions, with a minimum investment of Rs 50 million. The bond’s principal will be repaid on December 29, 2026.
Student outflow leads to Rs 48.25 billion foreign currency drain
Nepal spent Rs 48.25 billion in foreign currency on overseas education during the first four months (July 17 to November 16) of the current fiscal year, reflecting a 28 percent rise from Rs 37.76 billion in the same period last year. In contrast, foreign students studying in Nepal contributed only Rs 1.2 billion. Since the COVID-19 pandemic, outward spending has increased steadily, with Rs 1.38 billion recorded in the previous full fiscal year. While some economists see long-term benefits through skill development and remittances, others argue that political uncertainty and limited domestic prospects are pushing young people abroad.
Mechi Customs begins trial of online valuation software
The Mechi Customs Office in Kakarbhitta has started piloting an online valuation software system to simplify and speed up customs clearance. Replacing the traditional reference price list, the system calculates duties based on actual transaction values. Chief Tax Officer Shivalal Neupane said the software will be rolled out to eight customs offices nationwide, including Bhadrapur. For fiscal year 2025/26, Mechi Customs has a revenue target of Rs 18.877 billion and has already collected Rs 6.82 billion in the first five months (July 17 to November 16).
Nepal Police collects over Rs 402.5 million in monthly revenue
Nepal Police generated Rs 402.5 million in revenue within one month (November 17 to December 15) through enforcement activities. According to police headquarters in Naxal, Rs 179.5 million came from confiscated illegal goods, while Rs 123.7 million was collected through court verdict enforcement. Traffic fines added Rs 71.5 million, and seizures of illegal gold and silver contributed Rs 8.9 million. Additional revenue was collected from cases involving illegal Hundi transactions, unexplained cash, and unauthorized extraction of river materials and timber.
NAC sends narrowbody aircraft to Israel for engine replacement
Nepal Airlines Corporation (NAC) has begun the process of replacing the engine of its narrowbody A-320 aircraft. As stated in a press release issued Monday, NAC reached an agreement with Israel Aerospace Industries (IAI) covering engine maintenance and lease expenses under the existing “Maintenance with Lease Support” agreement. The aircraft left Kathmandu for Dubai on December 28 and is scheduled to arrive in Tel Aviv on December 29. The airline expects the aircraft to return to Nepal by the second week of January following engine installation.
Tanahu hydropower project achieves 72 percent physical progress
The 140 MW Tanahu Hydropower Project on the Seti River has reached 72 percent physical and 66 percent financial completion. Project chief Shyamji Bhandari said civil works at the powerhouse are nearly finished at 98 percent, while progress at the dam site (Package-1) and transmission lines (Package-3) remains slow. Package-1, managed by a Vietnamese–Nepali joint venture, stands at 47 percent completion after a 2.5-year delay caused by initial contractor failure. The 220 kVA transmission line to Bharatpur is facing obstacles related to forest clearance and funding. Backed by ADB and JICA, the USD 505 million project is expected to be completed before the first month of the next fiscal year.
Five construction firms blacklisted for contract violations
The Public Procurement Monitoring Office (PPMO) blacklisted five construction and supply companies on Monday for failing to fulfill contractual obligations. Kanchharam Construction and China-based Chongqing International Construction Corporation (CICO) were barred for one and a half years based on recommendations from the Rural Road Network Improvement Project. Dragon Construction received a similar penalty. Singdan Suppliers and Construction and Bishal Nirman Sewa were blacklisted for one year each. During the suspension period, the companies are prohibited from participating in public procurement processes.
Department fines three firms for violating consumer protection law
Following market inspections, the Department of Commerce, Supplies, and Consumer Protection took action against 17 businesses. Three firms were fined a combined Rs 110,000 under the Consumer Protection Act, 2018. Samjhana Achar Udhyog was fined Rs 10,000, while Aarohan Fashion Craft and Sadhana Suppliers were fined Rs 50,000 each. The remaining 14 firms were instructed to correct their practices. The department said it continues regular monitoring to curb black marketing and safeguard consumer rights.
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