KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic and development indicators over the first seven months of fiscal 2025/26 show a mixed yet dynamic picture, reflecting both growth opportunities and structural challenges. Foreign trade expanded to Rs 12.916 billion, driven by a sharp rise in exports, which improved the import-export ratio, though the trade deficit remains significant. The surge in electric vehicle imports highlights a shift toward green technology, while gold and silver prices show market stability.
Life insurance companies and other financial institutions increasingly favor equity investments over low-yield deposits, signaling a strategic adaptation to low interest rates. Government initiatives, including workplace-based training, KAHS infrastructure development, and Rara Lake road upgrades, indicate efforts to strengthen human capital and tourism, although delays and funding gaps persist in health and education projects.
Tourism data reveal robust regional activity in Mustang, contrasted with reduced hotel occupancy in Sauraha due to election-related uncertainties. Meanwhile, policy focus on energy sector expansion and digital voter engagement demonstrates an alignment of political agendas with economic modernization and public participation priorities, suggesting that Nepal’s short-term growth is intertwined with infrastructural, financial, and electoral dynamics.
Foreign trade hits Rs 13 billion in seven months
Nepal’s trade reached Rs 12.916 billion in the first seven months of fiscal year 2025/26, a 15.76% increase from last year, according to the Department of Customs. Imports rose 13.65% to Rs 11.234 billion, and exports surged 32.19% to Rs 1.681 billion. Trade activity peaked in January, likely influenced by the upcoming elections, but the trade deficit grew 10.91% to Rs 9.553 billion.
Electric vehicle imports exceed Rs 13 billion
Nepal imported EVs worth Rs 13.847 billion in the first seven months of the fiscal year, totaling 5,894 vehicles. This generated Rs 8.46 billion in revenue. China supplied 71% of imports (4,204 units), followed by India with 1,263 units and Thailand with 401 units.
Gold stable, silver drops to Rs 5,050 per tola
Gold prices remained steady at Rs 304,700 per tola (11.66 grams), according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver, however, declined by Rs 10 per tola, trading at Rs 5,050.
Life insurance companies invest Rs 42 billion in stock market
Life insurance firms have sharply increased their holdings in the secondary market, reaching Rs 42.403 billion by the second quarter of this fiscal year, up 64.54% from Rs 25.77 billion last year. The move follows a drop in fixed deposit interest rates below 3% at commercial banks. Himalayan Life Insurance led with Rs 12.475 billion, followed by Nepal Life at Rs 6.569 billion, while state-owned National Life Insurance cut its stock exposure by 73.07%.
Finance Minister pledges full support for upcoming polls
During the Nepal Tourism Seminar in Kathmandu, Finance Minister Rameshore Khanal assured that the government would provide all necessary resources for the successful completion of elections. He acknowledged challenges from political instability and noted ongoing policy measures to support economic growth, including interventions in the tourism sector, while prioritizing the electoral process.
Export growth improves import-export ratio
Rising exports have strengthened the country’s trade balance. The import-to-export ratio fell from 7.77:1 to 6.68:1, with exports comprising 13.02% of total trade, up from 11.40%, and imports slightly down to 86.98%. Exports reached Rs 168.145 billion by mid-February, up from Rs 127.204 billion, reflecting strong domestic production and international trade growth.
Energy sector features prominently in party manifestos
Major political parties have prioritized energy in their election agendas. The Nepali Congress targets 14,000 MW capacity and 750 units per capita consumption within five years. CPN (UML) aims to make Nepal a South Asian clean energy hub, and other parties, including CPN (Maoist Centre) and Rastriya Swatantra Party, plan up to 40,000 MW by 2100. Key themes include policy reforms, regional energy cooperation, and private sector investment.
Election Commission launches TikTok contest to engage voters
The Election Commission (EC) is encouraging citizens to create TikTok videos to promote awareness ahead of the March 5 House of Representatives elections. The top video will receive Rs 50,000, with Rs 30,000 and Rs 20,000 for second and third place, respectively. Participants must submit one-minute videos highlighting voter education and election conduct by March 1. The EC can also use winning content for official publicity, aiming to engage younger voters via social media.
Life insurers increase equity exposure amid low interest rates
Thirteen insurers have expanded stock market investments to boost returns. SuryaJyoti Life grew by 100.23% to Rs 4.641 billion, Sanima Reliance Life by 175.19%, while Life Insurance Corporation and IME Life invested Rs 3.116 billion and Rs 2.562 billion, respectively. MetLife Insurance remains the only company without listed shares. The trend reflects a shift from low-yield bank deposits.
Labor Ministry introduces workplace-based training guidelines
The Ministry of Labour, Employment and Social Security has issued new procedures to strengthen workplace-based training and bridge skill gaps in Nepal’s labor market. Under the National Vocational Training Institute Development Committee Order 2024, training programs will range from 390 to 730 hours. Employers are required to guarantee employment after training—for example, one month of training requires a two-month job commitment. During training, the Institute will cover minimum wages and Social Security Fund contributions, aiming to provide skilled manpower while ensuring stable jobs for Nepali workers.
Rs 6 billion KAHS infrastructure project remains stalled
A long-term plan to build 26 faculty buildings at the Karnali Academy of Health Sciences (KAHS) in Chere Chaur, Jumla, is stalled due to funding shortages. Despite a detailed project report for the Rs 6.29 billion project being prepared nine years ago, only a basic science building and administrative block, costing Rs 760 million, have been completed. KAHS, serving 13 districts in Sudurpashchim, continues to hold classes in rented facilities. Registrar Laxmi Chandra Mahat said that although local donors provided 254,366.41 square meters of land, successive governments have not prioritized the budget for this health tourism hub.
Health Minister assures KAHS funding and infrastructure support
During a February 12 visit to Jumla, Health Minister Dr. Sudha Sharma Gautam committed to completing the stalled Rs 6 billion Karnali Academy of Health Sciences (KAHS) project. She pledged budget prioritization and construction of a 6 km access road to Chere Chaur. KAHS currently hosts over 500 staff and students across 12 programs, facing severe residential and academic space shortages.
Budget approved for Rara Lake access road
The Ministry of Physical Infrastructure and Transport has secured Rs 910 million to blacktop the 15-kilometer road from Baluwa Khola to Diyaragaun, the main route to Rara Lake in Mugu. Shrawan Kumar Mahatara, Chief of Road Division Jumla, credited Infrastructure Minister Madhav Chaulagain and former lawmaker Gyanendra Bahadur Shahi for the funding. Despite operations since fiscal year 2012/13, the 93-kilometer Nagma-Gamgadhi road remained mostly unpaved. The multi-year project aims to improve tourism and economic activity by replacing muddy tracks with asphalt.
Mustang tourist arrivals reach 325,000 in seven months
Tourist arrivals in Mustang totaled 325,558 during the first seven months of the fiscal year, including 69,814 foreign and 252,664 domestic visitors. Inspector Nawaraj Neupane reported a 5.33% decline from last year. Most visitors arrived via the Beni-Jomsom road, with peak traffic in mid-October and mid-November. While Indian tourists primarily visit for Muktinath, about 3% of foreign visitors explore Upper Mustang. Improved road connectivity remains a key driver of tourism growth.
Nepalgunj Customs collects over Rs 11 billion
The Nepalgunj Customs Office in Banke collected Rs 11.046 billion during the first seven months of fiscal 2025/26. Office Chief Janardan Paudel noted an increase of Rs 92.4 million compared to last year, but only 45% of the annual target of Rs 24.545 billion was achieved. Monthly collections ranged from 69% to 88% of targets. Despite the Integrated Check Post at Jamunaha border, the high trade deficit remains a concern.
Sauraha hotel occupancy drops to 50% during peak season
Hotel occupancy in Sauraha, Chitwan, has fallen to 50% during the peak tourist months of February to April, down from the historical 80%. Om Prakash Pandey, President of the Regional Hotel Association Chitwan, linked the drop to the upcoming March 5 election deterring international visitors. The 148 hotels in Sauraha employ around 6,400 people, and the decline in tourists is affecting local livelihoods and related businesses such as elephant safaris.
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