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.
Real Estate Market Rebounds After Three-Year Slump; 2081-82 Baisakh Sees Highest Transactions Since 2078:
Nepal’s real estate sector is showing signs of revival after a prolonged slowdown over the past three years. A combination of falling interest rates, infrastructure expansion, and policy flexibility has contributed to this positive shift. In Baisakh of fiscal year 2081-82, a total of 52,423 real estate transactions were recorded nationwide—the highest since 2078. Compared to the previous month, transactions increased by 5.2%. Revenue collection also rose by 11.34% to Rs 4.54 billion. In the first 10 months of 2081-82, land revenue reached Rs 37.76 billion. Easier mortgage terms and government support have strengthened investor confidence and market activity.
Nepal Securities Board Cracks Down on IPO Irregularities to Foster Investor-Friendly Market:
The Nepal Securities Board has initiated corrective measures to curb irregularities in Initial Public Offerings (IPOs) and create a more investor-friendly environment. With a rise in short-term profit-seeking through IPOs, the board plans to personally review company financials, tighten lock-in period rules, raise minimum IPO issuance thresholds, and closely monitor capital usage. Officials reveal that promoters and brokers have exploited small-cap companies to inflate share prices unfairly. The new reforms are expected to impact mainly hydropower firms, many of which currently dominate the IPO pipeline and have resisted these changes. Anti-corruption bodies and parliamentary committees have also urged reforms.
NRB Begins First-Ever IT Supervision of Commercial Banks to Ensure Digital Security:
For the first time, Nepal Rastra Bank (NRB) has initiated IT supervision of commercial banks to strengthen digital security and uniformity. In the first phase, Nabil Bank, Global IME Bank, and Nepal Bank Limited underwent inspection. The supervision covers software, mobile/internet banking, ATMs, cards, and cybersecurity systems. NRB aims to assess whether banks operate within its digital transaction policies and identify risks in technology usage. The initiative also targets inconsistencies due to banks using varied internal systems. NRB plans to supervise all banks to protect customers and bring uniformity to digital operations in Nepal’s rapidly evolving financial ecosystem.
Nepal’s EV Tax Policy Remains Volatile Despite Government Push for Green Mobility:
Despite promoting electric vehicles (EVs) as eco-friendly alternatives, the Nepali government has failed to maintain a consistent tax policy on EVs. From FY 2076/77 to 2081/82, every finance minister has altered customs and excise duties, causing uncertainty. Taxes have ranged from steep hikes that halted imports to sudden reductions favoring luxury EVs. Businesses and consumers have voiced concerns ahead of the upcoming FY 2082/83 budget, fearing more instability. EV adoption has surged, supporting local dealerships and reducing pollution, but erratic policies risk undermining these gains. Stakeholders urge the government to ensure stability, fairness, and a long-term vision in EV taxation.
Hydropower Companies Return to Profit, 58 Firms in the Green by Q3:
Nepal’s hydropower sector has shown signs of recovery, with 58 companies posting profits by the third quarter of the current fiscal year. Improved electricity sales — up by 12% to Rs 28.81 billion — contributed to a sector-wide net profit of Rs 1.44 billion, a sharp turnaround from a Rs 1.05 billion loss during the same period last year. Among the 58 profit-making firms, only 27 improved their earnings year-on-year. Sahas Urja posted the highest profit at Rs 834 million. Meanwhile, Upper Tamakoshi incurred the highest loss of Rs 2.06 billion. The total loss from 31 unprofitable companies stood at Rs 4.18 billion.
Hydropower Companies Earn Rs 28.81 Billion from Electricity Sales, EPS Improves:
Hydropower companies in Nepal earned Rs 28.81 billion from electricity sales by the third quarter of FY 2081/82, up 11.99% from the same period last year. Upper Tamakoshi led with Rs 4.27 billion in revenue, followed by Sanima Middle Tamor and Green Ventures. Sahas Urja posted the highest earnings per share (EPS) at Rs 29.42. Out of 89 listed firms, 58 reported positive EPS, reflecting improved profitability in the sector. However, 31 companies remained in the red, with Menchhyam Hydro showing the worst performance at negative Rs 45.03 EPS. Overall, the sector shows signs of recovery.
Rs 150 Billion in Loans to Local Governments Lie Idle, Govt Pays Over Rs 7 Billion in Interest:
Over Rs 150 billion transferred by the federal government to provincial and local levels under cash transfer schemes remains unspent, according to the Auditor General’s 62nd report. Despite borrowing the funds at 5.27% interest, the Ministry of Finance has already paid more than Rs 7.86 billion in interest. As of FY 2080/81, Rs 69.82 billion is parked in provincial accounts and Rs 79.43 billion in local accounts. The report blames the lack of a proper cash plan as per Rule 29 of the Financial Procedure and Fiscal Responsibility Regulations. It urges the government to first mobilise these idle funds before further borrowing.
Birgunj Customs Collects Rs 140.42 Billion in 10 Months, Meets 64% of Annual Target:
The Birgunj Customs Office has collected Rs 140.42 billion in revenue during the first 10 months of FY 2024/25, achieving 64.13% of its annual target of Rs 218.95 billion. Chief Customs Officer Deepak Lamichhane reported steady growth in monthly collections, with the highest recorded in Baishakh (Rs 15.72 billion) and Poush (Rs 15.47 billion). Monthly revenues ranged from Rs 11.10 billion to over Rs 15 billion, reflecting a consistent performance throughout the fiscal year. Lamichhane noted an upward trend in revenue and expressed optimism about reaching the full-year target in the remaining two months.
Over One-Third of Subsidised Loans Misused, Finds Auditor General’s Report:
Up to 36% of subsidised loans issued under Nepal’s interest-subsidised credit scheme may have been misused, a report submitted by a consultant to Nepal Rastra Bank shows, according to the Auditor General’s 62nd annual report. Field inspections of 31,664 borrowers revealed that 7% misused Rs 6.35 billion in loans, 12% lacked target group identification, and 6% took duplicate loans. Rs 21.25 billion is suspected to be misused. The report also criticises the scheme’s weak targeting, inadequate planning, and lack of transparency. Although over Rs 187 billion in loans have been disbursed, long-term sustainability and impact remain uncertain without reform and oversight.
Massive Tax Evasion in EV Imports, Nearly Rs 4 Billion Revenue Loss: Auditor General:
The Office of the Auditor General has revealed that Nepal lost nearly Rs 4 billion in revenue due to large-scale tax evasion in electric vehicle (EV) imports. The FY 2080/81 report, submitted to President Ram Chandra Paudel, states that EVs with 100–200 kW motors were falsely billed as under 100 kW to claim lower customs and excise duties. Most discrepancies were found at Rasuwagadhi and Tatopani customs offices. The report recommends recovering dues from importers and reviewing the current tax waiver policy, which critics argue benefits only the wealthy while excluding lower and middle-income buyers.
Melamchi Water Reaches Balaju, Nagarjun as KUKL Expands Supply Network:
Kathmandu Upatyaka Khanepani Limited (KUKL), through its Project Implementation Directorate, has begun distributing treated Melamchi water in Balaju and Nagarjun Municipality. The service now covers areas including Lazimpat, Buspark, Chapakot, Changali, Khokana, and wards 1 and 2 of Nagarjun. To enhance the supply network, 3,811 meters of pipeline are being installed along the Ring Road and within Balaju. Once fully operational, the project will distribute up to 270 million liters of water daily across Kathmandu. KUKL aims to address the Valley’s chronic water shortage, with support from the Ministry of Water Supply to prevent delays and ensure efficient distribution.
Babai Irrigation Project Nears 77% Completion Amid Budget Shortfalls and Delays:
The Babai Irrigation Project in Bardiya, launched to irrigate 36,000 hectares, has achieved 76.5% physical and 77.5% financial progress. With just over a year left before its FY 2025/26 deadline, 13.5% of the work remains. The Rs. 18.96 billion national pride project faces delays due to budget shortfalls, COVID-19 disruptions, and underperforming contractors. Rs. 14.7 billion has been spent so far, and costs may rise to Rs. 22 billion if the timeline extends. Currently, the project supplies water to 26,000 hectares. Work is ongoing on 91 km of main and 313 km of sub-canals, though some contracts are still stalled or reissued.
Kakadbhitta-Laukahi Road Project Urges Urgent Diversion Work Ahead of Monsoon:
With monsoon approaching, the Kakadbhitta-Laukahi Road Project Office (Eastern Section) in Damak has directed contractors to urgently complete diversion work along the East-West Highway, part of the Asian Highway upgrade. Despite Rs. 10 billion in funding backed by the Asian Development Bank, only 19% of roadwork and 17% of bridge and culvert construction have been completed. Project Chief Sunil Babu Pant warned of flood risks and traffic disruptions if diversions remain unfinished. Locals have expressed growing concern over safety and delays. A rapid response team has been mobilized, and authorities say construction will continue through the monsoon.
Auditor General Calls for Independent Probe into Cross-Holdings in Insurance Companies:
The Office of the Auditor General has recommended an independent investigation into cross-holdings in the founder share ownership of insurance companies, citing conflicts of interest. In its 62nd annual report, the office urged the Nepal Insurance Authority to monitor such investments and ensure compliance with legal limits. As per Section 25(3) of the Insurance Act, 2079, members of the same family cannot own more than 15% of a company’s paid-up capital. Section 25(5) further prohibits individuals or related entities from holding over 1% in multiple insurance companies. The Auditor General emphasized the need to control cross-holdings to prevent regulatory violations.
Insurance Funds Not Invested in Productive Sectors, Says Auditor General:
The Auditor General’s 62nd annual report, submitted to the President, highlights that insurance companies and the Nepal Insurance Authority have failed to invest collected funds in productive sectors. Despite legal limits on fixed deposits in banks, most insurers have parked up to 80% of their investments in term deposits to earn interest, bypassing the mandated ceiling. The report stresses the need to channel funds into development and infrastructure to boost income and employment. It also flags low insurance coverage (only 42.9% of the population), minimal GDP contribution (~3%), poor rural reach, weak uptake in agriculture insurance, and a lack of actuarial education.
Musikot’s Ward 10 Hits Record Garlic Harvest, Eyes Market Boom:
Ward No. 10 of Musikot Municipality, Rukum West, has achieved a record garlic harvest this year, producing 140 metric tonnes worth approximately Rs. 16.8 million. Ward Chairman Dhana Bahadur Khadka stated that 15 truckloads are ready for market, with traders already expressing interest. Most farmers in the four-settlement ward are engaged in garlic farming, supported by subsidised seeds and market access. As maize planting nears, farmers are rushing to harvest and dry the garlic. With strong yields and rising demand, the ward aims to be declared a ‘Garlic Production Pocket Area,’ strengthening local agriculture under the slogan ‘Earn in the village, enjoy at home.’
Battise Resort Emerges as Panchthar’s New Tourism Gem, Blending Nature, Culture, and Local Enterprise:
A stunning new tourist attraction, Battise Resort, has opened near Battise Falls in Ward No. 2 of Falgunanda Rural Municipality, Panchthar. Developed with a Rs. 15 million investment by South Korea-based Nepali Prem Limbu, the resort features cottages, homestays, a zoo, gardens, and Himalayan-themed sculptures. Managed by Limbu’s wife, Renuka Rai, the eco-friendly resort showcases local architecture, cuisine, and crafts. With a cool climate, scenic charm, and accessibility to Ranke and Sukepokhari, it attracts 30–100 visitors daily. Locals and officials hail it as a model for sustainable tourism. Chairman Brijahang Angdembwe praised the initiative’s role in boosting local tourism.
