KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to source on key financial updates in Nepal. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top economic news highlights.
NEPSE Falls by 3.90 Points as Trading Volume Shrinks Sharply: On Tuesday, the Nepal Stock Exchange (NEPSE) index declined along with a significant drop in total trading volume. Compared to the previous day, the NEPSE index dropped by 3.90 points, settling at 2,654 points. The daily trading volume also saw a notable contraction—falling from NPR 13.18 billion on the previous day to NPR 7.65 billion today. Despite the overall decline, the share prices of 99 companies rose, while 148 companies saw a drop. The microfinance sector stood out, registering a 1.10% gain. Similarly, the hydropower and trading sectors increased by 0.27% and 0.11%, respectively.
Gold and Silver Traders Urge PM Oli to Reconsider 2% Luxury Tax in Budget: Prime Minister KP Sharma Oli has been urged by the leadership of organizations associated with the gold and silver trade to reconsider the proposed 2% luxury tax on gold and silver transactions included in the upcoming fiscal year’s budget. During a meeting held at the Office of the Prime Minister and Council of Ministers, a delegation comprising presidents of various gold trading associations, requested the government to reconsider the luxury tax provision, warning that its implementation would severely damage their business.
IPPAN Accuses Finance Minister of Undermining Energy Sector via Backdoor PPA Clause: Independent Power Producers Association, Nepal (IPPAN) have accused Finance Minister Bishnu Paudel of attempting to undermine the energy sector by including a “take-and-pay” Power Purchase Agreement (PPA) provision in the upcoming fiscal year 2025/26 budget without any recommendation from the Ministry of Energy. They allege that by inserting the take-and-pay PPA clause through a backdoor in the budget announcement, Minister Paudel has acted against his official responsibilities and violated the fundamental principles of the budget process.
Government Decides to Privatize Failing and Closed Public Enterprises: After years of public and political debate, the government has finally reached a conclusion regarding the future of failing and closed public enterprises. Acknowledging its inability to operate seven major state-owned enterprises under the Ministry of Industry, Commerce, and Supplies, the government has decided to manage their investments. This decision paves the way for either public-private partnerships or full privatization of these decades-old loss-making or shuttered industries.
NRB Governor Warns of Immediate Action Against Banks Involved in Fraud: Dr. Biswo Nath Poudel, Governor of Nepal Rastra Bank, has issued a stern warning that any bank found cheating customers will face immediate punishment. Speaking at a discussion organized by Nepal Rastra Bank’s Janakpur office today, with representatives from the Federation of Nepalese Chambers of Commerce and Industry and various banks and financial institutions, he emphasized the central bank’s focus on protecting the public’s assets and ensuring that banking funds reach a wider population.
Over Rs 60 billion in FDI Pledged in First 11 Months of FY 2024/25: Nepal received more than Rs 60 billion in foreign direct investment (FDI) commitments during the first 11 months of the current fiscal year 2024/25. According to the Department of Industry, a total of Rs 60.60 billion was pledged through 717 projects from Shrawan to Jestha (Nepali calendar). Of the total investment commitment, 50%—amounting to Rs 30.44 billion—was targeted at the services sector.
Melamchi Water to Flow in Kathmandu Even During Monsoon This Year: The government is in the final stages of preparing to supply Melamchi water to Kathmandu residents even during the monsoon season this year. According to Minister for Water Supply Praip Yadav, works have progressed to ensure uninterrupted supply by mixing water from the nearby Ribarma River. Last year, water supply was halted on June 24 due to high turbidity caused by rainfall. This year, authorities say the system has been upgraded to continue supply even during the rains.
One Year of RBC Implementation in Insurance: Progress, Challenges Discussed: An interaction program was held in Kathmandu to review one year of implementing Risk-Based Capital (RBC) regulation in Nepal’s insurance industry. Organized by the Insurance Board of Nepal, the event focused on reviewing achievements, identifying challenges, and collecting feedback from insurers regarding the future roadmap for RBC implementation.
Foreign Aid to Nepal Declines by Rs 61 billion Over Four Years: At a time when the government is struggling to collect expected revenue and facing a shortage of development resources, foreign aid to Nepal has also seen a continuous decline. Over the past four years, foreign aid has dropped by approximately Rs 61 billion. This reduction includes both concessional loans and grants. The decline is attributed to the government’s limited capacity to spend allocated funds and weak project implementation performance.
Electricity Production Surges with Monsoon; Nepal Begins Exporting 350 MW Daily: Run-of-the-river hydropower projects—which were producing only one-third of their installed capacity during the dry season—have begun to ramp up generation, according to the Nepal Electricity Authority (NEA). With the increase in production, surplus electricity not consumed domestically is being exported. NEA spokesperson Rajan Dhakal stated that since Sunday, Nepal has started exporting an average of 350 megawatts of electricity daily.
Banks Disburse Rs 368 billion Loans in First 10 Months of Current Fiscal Year: From Shrawan to Baisakh (first 10 months of FY 2024/25), banks and financial institutions in Nepal disbursed loans totaling Rs 368.68 billion. Compared to last Asar, this is a 7.3% increase, and 8.4% more than the same period last fiscal year. However, this falls short of Nepal Rastra Bank’s target of Rs 682 billion loan expansion for the year—lagging by Rs 314 billion.
Hike in Customs Duty on MS Wire Rod Hits Iron Industries Hard: Industrialists have complained that a recent hike in customs duty on the import of MS wire rod—from 5% to 10%—has negatively affected more than two dozen iron-based industries. The customs duty hike was introduced via the Financial Bill on May 29 by Finance Minister Bishnu Paudel. Industries claim the policy favors only a few sectors while harming the majority, especially those involved in making iron mesh and related products.
Energy Producers May Soon Get Direct Market Access Under New NEA Transmission Policy Draft: The Electricity Regulatory Commission has prepared a draft of the “Open Access Directive,” which would allow energy producers to sell electricity directly to consumers using Nepal Electricity Authority (NEA)’s transmission lines. On Monday, the Commission held consultations with high-ranking officials from the Ministry of Energy, Water Resources and Irrigation, NEA, and other relevant bodies. The draft was prepared by a task force led by Dr. Madhusudhan Adhikari, a member of the Commission.
Only 31.9% of Capital Budget Spent by 22 Ministries with Just One Month Left in Fiscal Year: With just one month remaining in the current fiscal year, capital expenditure by 22 development-focused ministries stands at an average of only 31.9%. Out of these, 19 ministries have failed to spend even half of their allocated capital budget. The remaining three ministries have also spent less than 55%. As of mid-June, in FY 2081/82 (2024/25), the Ministry of Physical Infrastructure and Transport leads in capital expenditure, having spent Rs 75.92 billion (54.25%) of its Rs 140 billion capital budget.
Over 500,000 Foreign Tourists Visited Nepal in First Five Months of 2025: More than 500,000 foreign tourists visited Nepal in the first five months of 2025, according to statistics released by the Nepal Tourism Board. A total of 501,264 international visitors arrived in the country between January and May. The monthly breakdown shows a steady inflow of tourists: 79,991 in January, 96,880 in February, 121,800 in March, 116,490 in April, and 86,216 in May.
All Seven Provinces Struggle to Expand Internal Revenue: On Sunday, all seven provincial governments unveiled their budgets for the upcoming fiscal year2025/26. They have identified the federal grant, revenue-sharing allocations, and carry-forward balances as the main sources of income. While all provinces have set targets to increase internal revenue, limited rights and capacities have left little room to expand those revenue bases.
Kalika Municipality in Chitwan Has Lowest Audit Irregularities Among Local Governments: Among the seven local units of Chitwan district, Kalika Municipality recorded the lowest amount of audit irregularities. This was revealed in the annual audit report published by the Office of the Auditor General. The municipality has shown stronger fiscal discipline compared to others in the district.
Five Years On, Golbazar–Lagadi–Gadiyani Road Still Incomplete: Construction of the 28-kilometer Golbazar–Lagadi–Gadiyani road—intended to be completed within two years—has dragged on for nearly five years and remains unfinished. The road, which connects Siraha Municipality, Arnama Rural Municipality, and Golbazar Municipality, has left local residents dealing with perennial dust and mud due to prolonged delays.
Hotel Investment Booms Across Rupandehi Targeting Indian Tourists: With the construction of the international airport in Bhairahawa, hotel investment in Rupandehi has surged—particularly targeting Indian tourists visiting the birthplace of Buddha, Lumbini, and using the district as a transit point to reach destinations such as Pokhara, Muktinath, Chitwan, and Kathmandu. Previously concentrated in Butwal, Bhairahawa, and Lumbini, the hotel business has now expanded across the entire district. The number of hotels—ranging from small and mid-sized to large and luxury establishments—has increased significantly.
Relekhola Hydropower Project in Annapurna Connected to National Grid: The 6-megawatt Relekhola Hydropower Project, constructed at Narchyang in Annapurna Rural Municipality-4, Myagdi, has been connected to the national power grid. The project was promoted by Hyum Consult Pvt. Ltd. and began generating electricity after successfully completing internal testing. According to project chief Darshanik Kafle, electricity generation began once the equipment installed at the powerhouse passed internal testing and the transmission line connecting the generated power to the national grid was also successfully tested.
Ministers Discuss Low Price of Spring Paddy as Farmers Raise Concerns: Following complaints from farmers about not receiving fair prices for Chaite Dhaan (spring paddy), discussions were held between the concerned ministries. On Monday, Minister for Agriculture and Livestock Development Ramnath Adhikari and Minister for Industry, Commerce, and Supplies Damodar Bhandari met to address the issue. According to the Agriculture Minister’s Secretariat, the meeting discussed several issues: the current state of Chaite Dhaan, why farmers are not receiving fair prices, the current rice import situation from India, and the stock levels of rice and paddy among others.
Gold Price Falls by Rs 2,500 Per Tola in a Day: On Tuesday, the price of gold dropped sharply by Rs 2,500 per tola (11.66 grams), settling at Rs 195,000 per tola, down from Rs 197,500 the previous day. Previously, on April 22, gold had reached its highest-ever price of Rs 197,900 per tola. Similarly, the price of silver fell by Rs 5 to Rs 2,160 per tola.
