KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The March 5 House of Representatives election had a pronounced short-term impact on Nepal’s economy and daily life, temporarily halting industrial, retail, and cross-border trade due to border closures, a two-day public holiday, and restrictions on domestic flights. While the government injected Rs 19.62 billion into election management, boosting security and printing sectors, productivity in major infrastructure projects and commercial activity declined sharply.
The reopening of customs offices and limited banking services signaled a gradual return to normalcy, though external factors such as rising fuel prices from India, driven by the US waiver on Russian oil, could amplify domestic energy costs. Meanwhile, around 1.9 million Nepali migrant workers and their families remain under stress due to ongoing West Asian conflicts, highlighting the broader socio-economic ripple effects of regional instability.
Precious metal markets also reflected market caution, with gold and silver prices declining amid the electoral and economic disruptions. Overall, the election illustrates the complex interplay of domestic political events, international developments, and economic activity in Nepal.
Gold and silver prices decline
Gold and silver prices fell in local markets on Friday, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold dropped Rs 4,200 per tola (11.66 grams), trading at Rs 313,400 per tola, down from Rs 317,600. Silver declined Rs 95 per tola, trading at Rs 5,445 per tola, compared to Rs 5,540 previously.
Over Rs 19.62 billion allocated for election management
The Ministry of Finance allocated Rs 19.62 billion for managing and securing the March 5 House of Representatives election. Preliminary estimates indicate around 90% of the budget was spent. Of this, Rs 6.72 billion went to the Election Commission, Rs 10.88 billion to the Ministry of Home Affairs, and Rs 1.99 billion to the Ministry of Defence. A total of 147,000 election police were deployed using Rs 9.15 billion. International support included Rs 560 million from China, Rs 390 million from Japan, and vehicle aid from India.
Nationwide customs offices resume regular operations after polls
Following the 72-hour election-related closure, customs offices across Nepal resumed normal operations on Friday. Director General Shyam Prasad Bhandari confirmed that cargo clearance restarted at northern and southern borders, including Birgunj, immediately after polling ended Thursday evening. Essential goods such as petroleum, gas, fruits, and vegetables continued to be cleared through regular checks during the closure. The reopening marks a return to normal cross-border trade after security measures temporarily halted commercial movement.US waiver for Russian oil could impact Nepal through India’s fuel supply
The United States has granted India a temporary exemption to import Russian crude and petroleum products loaded before March 5, valid until April 4, to ease supply disruptions caused by tensions in the Persian Gulf. India, Nepal’s main supplier of fossil fuels, imports roughly 5 million barrels daily. Analysts warn that limited flow through the Strait of Hormuz means the relief is only short-term. Rising crude prices in India could indirectly increase fuel and energy costs in Nepal, affecting transportation, industry, and household expenses.
Nepali families distressed by escalating conflict in West Asia
About 1.9 million Nepali migrant workers and their families are under significant stress due to ongoing military tensions involving Iran, the US, and Israel. Families like Pramila Poudel’s in Baglung report sleep and appetite loss as loved ones work near conflict zones in Kuwait and Qatar. While the Ministry of Labor, Employment, and Social Security notes that workers remain largely safe, except for one reported fatality in the UAE, an emergency response team led by Foreign Secretary Amrit Bahadur Rai has been established. Ten diplomatic missions are now monitoring over 357,913 Nepalis in Qatar and 175,000 in Kuwait around the clock.
Banks operate limited holiday counters during post-election break
Commercial banks across Nepal operated limited branches on Friday despite the post-election public holiday. Designated “holiday counters” provided essential services like cash withdrawals and clearing. While physical branches ran on restricted schedules, Nepal Rastra Bank ensured digital banking, ATMs, and mobile banking remained fully operational nationwide. Customers were encouraged to use online platforms, with holiday counters available in select provincial locations for urgent transactions.
Impact of elections on nationwide economic activities
The House of Representatives election held on March 5 temporarily slowed economic activity across Nepal. A 72-hour closure of border points and customs offices until Thursday evening paused the entry of non-essential commercial goods, disrupting supply chains and revenue collection. Large infrastructure projects, including the Nagdhunga-Sisnekhola tunnel, halted work for five days as laborers returned home to vote. In addition, the two-day public holiday led to closures of private businesses and restricted banking to limited “holiday counters,” effectively pausing the domestic market. While the government injected nearly Rs 19.62 billion into election management, benefiting the security and printing sectors, industrial and retail productivity fell sharply during the polling week.
International passenger movement continues amid domestic flight halts
Tribhuvan International Airport handled 1,835 international passengers on election day, March 5. The airport managed 20 departures and 19 arrivals, mostly to destinations outside West Asia. Domestic flights were largely suspended due to vehicle restrictions, with only two flights by Nepal Airlines and Shree Airlines to Bhojpur and Surkhet. Fly Dubai and Air Arabia initiated point-to-point flights for stranded passengers, while Nepal Airlines suspended Dubai routes on March 6–7 due to regional tensions.
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