KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic developments present a mixed picture of improving financial activity, expanding domestic economic initiatives and persistent structural vulnerabilities. Foreign grant receipts rose to Rs 7.985 billion in the first quarter of fiscal year 2026/27, reaching 12.93 percent of the annual target and significantly outperforming the corresponding period last year. Similarly, Prabhu Mahalaxmi Life Insurance reported a 45.88 percent increase in quarterly net profit, while manufacturing industries in Sudurpashchim operated at 51.29 percent of installed capacity, reflecting pockets of industrial growth.
However, the devastating August 26 Bhote Koshi floods have exposed substantial economic and infrastructure vulnerabilities. Damage to the energy sector alone reached Rs 132.83 billion, with recovery requirements estimated at Rs 218.58 billion. The financial sector faces an additional Rs 65.215 billion in rehabilitation costs, highlighting the wider economic consequences of natural disasters.
Meanwhile, government initiatives to strengthen social security for public procurement workers and promote indigenous products signal efforts to improve labour protection and stimulate domestic entrepreneurship. Tourism also showed encouraging momentum, with Mustang attracting 35,858 visitors during the festive period.
Overall, the developments suggest an economy with emerging growth opportunities but significant recovery, infrastructure resilience and employment challenges. Sustaining progress will require effective resource mobilisation, stronger disaster preparedness, industrial investment and broader participation in economic growth.
Gold remains at Rs 283,000 per tola, silver at Rs 3,810
Gold and silver prices remained unchanged in the domestic market on Sunday, maintaining the rates recorded on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Associations, hallmark gold was traded at Rs 283,000 per tola (11.66 grams), while the price stood at Rs 242,625 per 10 grams. Similarly, silver was priced at Rs 3,810 per tola and Rs 3,266 per 10 grams. Both precious metals maintained their previous trading prices, according to the federation.
Foreign grant receipts reach Rs 7.985 billion in first quarter
Foreign grant inflows into the government treasury totalled Rs 7.985 billion during the first quarter of fiscal year 2026/27, showing a significant improvement over the same period last year. Data released by the Financial Comptroller General Office (FCGO) show that the amount received by mid-October accounted for 12.93 percent of the annual grant target of Rs 61.74 billion. During the corresponding period of the previous fiscal year, the government had received approximately Rs 2 billion in foreign grants, equivalent to 3.76 percent of that year’s annual target. The latest figures indicate an improvement in the mobilisation of external grant resources during the opening months of the current fiscal year.
NPC estimates Rs 65.215 billion for financial sector recovery
The National Planning Commission has estimated that Rs 65.215 billion will be required to restore the financial sector following the devastating floods in Rasuwa on August 26. According to preliminary assessment findings, the disaster damaged 16 bank branches belonging to 12 commercial banks, affecting 78,204 depositors. It also disrupted non-hydropower-related loan investments worth Rs 2.43 billion. The combined financial losses suffered by the public and private sectors have been estimated at Rs 65.031 billion. The projected recovery requirement exceeds the initial losses, reflecting the additional costs associated with rebuilding damaged infrastructure and restoring services.
Bhote Koshi floods cause Rs 132.83 billion in energy sector losses
Preliminary findings of the Post-Disaster Needs Assessment (PDNA), released by the National Planning Commission (NPC), have put the damage to Nepal’s energy sector from the August 26 Bhote Koshi floods at Rs 132.83 billion. The assessment estimates direct damage to physical assets at Rs 89.26 billion, while economic losses resulting from disrupted operations amount to Rs 43.56 billion. The floods affected 14 hydropower facilities, six substations and transmission networks in Rasuwa and Nuwakot districts. The estimated cost of rehabilitating and rebuilding the affected energy infrastructure stands at Rs 218.58 billion, as authorities consider necessary changes to reconstruction and infrastructure design.
Government introduces minimum wage and social security provisions for public procurement workers
The government has introduced new guidelines to guarantee minimum wages, social security coverage and basic labour rights for workers hired through public procurement contracts, including those in construction, industrial, consultancy and information technology services. Under the new provisions, employers must register eligible workers with the Social Security Fund (SSF). For workers in construction and consultancy services, the government and employers are each required to contribute 10 percent towards the prescribed social security contribution. The guidelines also require employers to deposit workers’ wages directly into their bank accounts. Recruitment fees cannot be charged to workers, nor can employers recover payments through coercion or undue pressure. Other provisions include mandatory workplace safety arrangements, free worker registration and mechanisms for addressing labour-related complaints. Employers are required to resolve grievances within seven days, while repeated violations of labour regulations may result in blacklisting. Businesses that fail to enrol their workers in the Social Security Fund will also be disqualified from participating in public procurement processes.
NEA prepares festive power supply as peak demand projected at 1,700 MW
The Nepal Electricity Authority (NEA) has finalised operational arrangements to ensure an uninterrupted electricity supply throughout the Tihar and Chhath festivals. On Sunday, the authority issued directives to regional distribution centres, grid operation units and load dispatch teams to maintain round-the-clock technical standby services and complete pending transmission line maintenance works promptly. The NEA has projected that domestic electricity demand could reach 1,700 megawatts during the evening peak on Laxmi Puja. Against this, the country’s total domestic generation capacity is estimated at 2,500 MW, indicating sufficient capacity to meet anticipated consumption during the festive period. The authority expects the available generation capacity to ensure a reliable domestic supply without the need for electricity imports or load-shedding measures.
Government launches three-day Tihar fair to promote indigenous products
The government has launched a three-day Tihar Indigenous Products Fair in Kathmandu to promote locally produced goods and provide market opportunities for domestic entrepreneurs. The fair began on Sunday at the Bagmati provincial office premises of the Food Management and Trading Company in Thapathali. It features a range of locally produced goods, including indigenous agricultural products, traditional food items, flower garlands, earthenware, handicrafts and traditional cultural attire. Farmers, young entrepreneurs and women-led businesses are among the participants. The initiative aims to encourage consumers to purchase domestic products while connecting local producers with wider markets. The government also plans to replicate the fair’s model across all 77 districts, using public holidays and festive occasions to promote local production, entrepreneurship and small-scale businesses throughout the country.
Prabhu Mahalaxmi Life Insurance reports 45.88 percent rise in quarterly profit
Prabhu Mahalaxmi Life Insurance Company Limited recorded an unaudited net profit of Rs 93 million in the first quarter of fiscal year 2026/27, representing a 45.88 percent increase from Rs 63.7 million in the corresponding period of the previous fiscal year. The company’s financial performance also improved in terms of premium collection, with gross premium income rising 30.25 percent to Rs 1.88 billion. Its life insurance fund expanded by 32.81 percent to reach Rs 19.718 billion during the review period. Based on its paid-up capital of Rs 5.307 billion, the company’s annualised earnings per share (EPS) stood at Rs 7.01. The quarterly results indicate growth in the company’s profitability, premium income and life insurance fund compared with the same period of fiscal year 2025/26.
Tourist arrivals in Mustang surpass 35,000 during festive season
Mustang welcomed more than 35,000 visitors during the Tihar holiday period, with favourable weather conditions contributing to increased tourist movement in the Himalayan district. According to the District Police Office, Mustang, a total of 35,858 tourists visited the district between October 18 and November 1. Of the total arrivals, 27,107 were domestic tourists and 8,751 were foreign visitors. The foreign tourist arrivals included 7,714 visitors from SAARC member countries and 1,037 from other nations. Many visitors travelled to Mustang for pilgrimage at the Muktinath Temple, while others explored the northern border area around Korala Pass and cultural heritage sites in settlements across the mountainous district. The favourable weather during the holiday period helped facilitate travel along high-altitude routes, contributing to the increase in visitor numbers.
Sudurpashchim industries operate at 51.29 percent of installed capacity
Manufacturing industries in Sudurpashchim Province operated at an average of 51.29 percent of their installed capacity, according to an annual economic activity report published by Nepal Rastra Bank (NRB). The report, which covers 14 major manufacturing sectors, recorded substantial growth in several industrial activities. Wheat flour production increased by 137.17 percent, sugar processing by 134.67 percent and brick manufacturing by 100 percent. The province has registered 1,599 industrial units with a combined capital investment of Rs 2.223 billion. These industries provide direct employment to 5,452 people. The findings point to the contribution of manufacturing activities to employment generation, regional industrial development and the expansion of local economic opportunities.
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