KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is showing mixed signals, marked by strong momentum in financial markets alongside persistent structural and fiscal challenges. A sharp rise in the NEPSE index and record-high gold and silver prices reflect increased investor activity and a flight to safe assets amid global uncertainty, while policy measures such as relaxed Social Security Fund loan rules and the rollout of a skills-focused national employment program aim to stimulate domestic demand and labor productivity.
Major long-term investments, including the Budhigandaki hydropower project and the Karnali transmission line, signal commitment to infrastructure-led growth, yet weak capital spending by provincial governments, declining sectoral budgets—particularly for water supply—and shortfalls in revenue collection highlight governance and execution gaps.
At the same time, Oxfam’s findings on extreme wealth inequality and rising food insecurity underscore the urgency of ensuring that economic gains translate into inclusive growth, especially as protests, administrative disruptions, and uneven service delivery continue to constrain broader economic recovery.
NEPSE jumps 42 points as turnover crosses Rs 11.85 billion
The benchmark NEPSE index rose sharply on Tuesday, gaining 42.26 points to close at 2,714.81, an increase of 1.58 percent. The hotel and tourism group led sectoral gains with a rise of 3.36 percent. Total market turnover exceeded Rs 11.85 billion, with more than 25.1 million shares traded. NRN Infrastructure and Development recorded the highest trading value, while Gurkhas Finance reached the 10 percent daily upper limit. Despite the broad market rally, SBL debenture holders posted the steepest loss, with prices declining by 4.23 percent.
Gold and silver prices hit fresh records in domestic market
Gold and silver prices climbed to new highs in the local market on Tuesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold reached Rs 284,700 per tola, while silver rose to Rs 5,880 per tola. Prices have been rising steadily since Sunday. In the international market, gold traded at USD 4,690 per ounce and silver at USD 94. Analysts attributed the surge to global uncertainty, inflationary pressures, and increased demand for safe-haven assets.
Govt rolls out national employment promotion program
The Ministry of Labour, Employment, and Social Security has officially replaced the Prime Minister Employment Program with the National Employment Promotion Program. Announced on Tuesday, the new scheme will be implemented across all 753 local governments and emphasizes skills training, entrepreneurship, and the reintegration of returnee migrant workers. The government has allocated Rs 2 billion for the current fiscal year, requiring that at least 80 percent of training activities be practical and aligned with labor market needs.
Social Security Fund relaxes loan eligibility rules
The Social Security Fund (SSF) has revised its loan provisions, reducing the contribution period required to access special loans to 12 months from the previous 36 months. Under the new rules, contributors can borrow between Rs 10,000 and up to 80 percent of their accumulated savings at an interest rate of 5.2 percent. Eligibility for other loans, including housing and education, has been shortened to 18 months of contributions. The fund currently covers around 2.7 million members, including over 2 million migrant workers and 667,000 formal sector employees.
Government clears Rs 406 billion funding plan for Budhigandaki hydropower project
The government has approved the financial framework for the 1,200-megawatt Budhigandaki Hydropower Project, with total costs estimated at Rs 406 billion, including interest during construction. The project will be financed through a mix of 70 percent debt and 30 percent equity. Since fiscal year 2015/16, around Rs 168 billion has been raised through fuel infrastructure taxes, while Rs 42 billion has already been distributed as compensation. Construction is expected to begin in 2028, with completion targeted within eight years.
Oxfam report highlights extreme wealth inequality in Nepal
A new report released by Oxfam International on Tuesday has revealed stark economic disparities in Nepal, showing that the richest 1 percent own 519 times more wealth than the poorest half of the population. The top 1 percent controls 24.5 percent of national wealth, while the bottom 50 percent share just 4.7 percent. The report also notes a 40 percent increase in food insecurity since 2019, now affecting 36.6 percent of Nepalis. Globally, billionaire wealth grew by 16 percent to USD 18.3 trillion, with Elon Musk topping the list at USD 500 billion.
Water supply ministry budget cut by Rs 16.44 billion over five years
The Ministry of Water Supply is facing a growing financial squeeze, with its share of the national budget falling from 2.92 percent in fiscal year 2020/21 to 1.43 percent in 2024/25. Over the past five years, total funding has declined by Rs 16.44 billion. Officials warn that the reduction threatens flagship programs such as the “One House, One Tap” campaign and Nepal’s 2030 sustainable development targets, particularly as climate change continues to dry up water sources.
Karnali to be connected to 132 kV transmission line by February 3
The Kohalpur–Surkhet 132 kV transmission line is nearing completion, with charging scheduled for February 3. Project chief Rabi Chaudhary said only one kilometer of wiring remains within the national park area. Despite weather-related delays, the Rs 700 million project has achieved full physical progress. Once operational, the line will provide Karnali Province with its first high-capacity transmission link, significantly reducing low-voltage problems and power outages across 10 districts.
Nepal receives 30,000 tons of G2G urea fertilizer from India
Nepal has received the first rail shipment of urea fertilizer purchased under a government-to-government agreement with India. The 30,000-ton consignment will be distributed across Madhesh, Bagmati, and Gandaki provinces. Additional shipments include 25,000 tons of DAP and another 30,000 tons of urea procured through international tenders. Agriculture Inputs Company Limited reported that 17,500 tons of potash are currently at Visakhapatnam port.
Lumbini Province capital spending remains sluggish at 18 percent
By January 14, Lumbini Province had spent Rs 7.95 billion, or 20.45 percent, of its Rs 38.91 billion annual budget. Capital expenditure stood at just 18.04 percent, totaling Rs 4.23 billion. The Health Ministry recorded the highest spending at 42.10 percent, while the Internal Affairs Ministry lagged at 6.55 percent. Several ministries reported single-digit progress despite repeated reminders from the federal government.
Gandaki Province spends only 16 percent of annual budget in six months
Gandaki Province utilized only Rs 5.33 billion, or 16 percent, of its Rs 31.97 billion budget in the first half of the fiscal year. This marks a decline from last year’s 19 percent expenditure over the same period. Capital spending remained particularly weak at 14.13 percent, with administrative disruptions following the Gen Z protests cited as a key factor. Revenue collection also lagged, reaching just 31.72 percent of the annual target.
Ilam traders protest closure of taxpayer service office
Business communities in Ilam have launched protests against the government’s decision to shut down the local Taxpayer Service Office. The move forces traders from Ilam, Panchthar, and Taplejung to travel to Bhadrapur in Jhapa for tax-related services. The Ilam Chamber of Commerce and Industry submitted a memorandum to the Finance Minister, noting that the office previously collected more than Rs 800 million annually. Contractors warned of possible blacklisting if tax clearance delays persist.
Inland Revenue Office Jumla falls short of mid-year target
The Inland Revenue Office in Jumla, covering Jumla, Kalikot, and Mugu districts, failed to meet its mid-year revenue target by Rs 31.1 million. By January 14, the office had collected Rs 159.8 million against a target of Rs 201.3 million. Officials cited difficult geography and low compliance in remote areas as major challenges. With an annual goal of Rs 640 million, the office plans to intensify taxpayer awareness efforts in the remaining months.
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