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.

Stock Market Rises by 1.60 Points After Budget Announcement: Following the budget announcement, the stock market increased by 1.60 points. After this rise, the NEPSE index settled at 2694 points. Trading volume also grew, with today’s turnover reaching NPR 922 crore compared to NPR 858 crore the previous day. A total of 115 companies saw their share prices rise, while 133 companies experienced declines. Two sectors attracted particular investor interest on this day. The Hotel and Tourism sector rose by 2.39%, and the Investment sector increased by 2.28%. The significant growth in these two sectors is largely attributed to the assurances provided in the budget.

Credit distribution becoming concentrated, says Governor Poudel: Governor Dr. Biswo Nath Poudel has raised concerns over possible credit concentration among limited borrowers. Speaking during Monday’s meeting of the Finance Committee on the Bank and Financial Institutions Act (BAFIA) amendment bill, he said the bill seeks to clarify who should and should not get loans. He said, “This bill aims to clearly define who can and cannot access loans from banks. Of the 1.94 million borrowers, 0.1% have utilized 3.9% of the total loans.”

NRB withdraws Rs 70 billion from banking system: Nepal Rastra Bank withdrew Rs 70 billion from the banking system in a single day on Monday. With increased liquidity in the market lately, the central bank has been continuously mopping up deposits from the banking system. Earlier, it had withdrawn Rs 80 billion in a single day. The central bank has issued a call for auction for 20 days, in which banks and financial institutions can participate. The auction is scheduled for 3 PM on Monday. Banks and financial institutions can bid a minimum of Rs 100 million and in multiples of Rs 50 million up to the total call amount.

World Bank Approves $257 Million Loan to Improve Nepal’s Electricity and Irrigation Services: The World Bank has approved loan assistance of 257 million US dollars (over 35 billion Nepalese rupees) for two projects aimed at improving Nepal’s electricity and irrigation services. The World Bank’s Executive Board approved the two projects for Nepal on May 29. According to the World Bank, the main objectives of these projects are to enhance electricity distribution services and to improve irrigation services to boost agricultural productivity.

Govt forms dialogue committee to address demands of transport entrepreneurs: To address the demands of transport entrepreneurs who halted public transportation and launched a protest, the government has formed a dialogue committee involving both the government and the transport business representatives. The negotiation team has been formed under the coordination of the Ministry of Physical Infrastructure and Transport, consisting of four representatives from the transport entrepreneurs and seven from the government side. After discussions on Monday between Home Minister Ramesh Lekhak and transport entrepreneurs, an agreement was reached to establish a dialogue team for problem-solving.

Government distributed Rs 1.5 billion in premium subsidies for agriculture and livestock insurance: The government has distributed Rs 1.61 billion in premium subsidies for agriculture and livestock insurance. According to the Agriculture and Livestock Development Ministry’s subsidy procedure for crop and livestock insurance, the government provided Rs 1.61 billion in subsidies during FY 2080/81 (2023/24). A total of Rs 2.02 billion worth of insurance premiums were collected under agricultural insurance. Of that, the government provided Rs 337.9 million for crop insurance and Rs 1.27 billion for livestock and fisheries insurance, as noted in the Economic Survey 2080/81 (2023/24).

New PPA policy blocks 17,000 MW of hydropower projects, says IPPAN: The new budget for FY 2082/83 (2025/26) has proposed that the power purchase agreements (PPA) of run-of-river hydropower projects be based on “Take and Pay” model instead of the previously used “Take or Pay” system. The Independent Power Producers’ Association Nepal (IPPAN) has criticized this, saying it blocks the construction of 17,000 MW worth of hydropower projects. IPPAN claims that despite financial institutions being reluctant to finance PPAs under the Take and Pay model, the government’s new policy threatens to dismantle the energy sector.

Government Allocates Rs 417 Billion for Provinces and Local Levels for Upcoming Fiscal Year: The government has allocated Rs 417 billion for provinces and local levels for the upcoming fiscal year. This budget includes equalization grants, conditional grants, special grants, and complementary (capital) grants under financial transfers. Out of the total allocation, Rs 97.56 billion has been set aside for the provinces and Rs 320.26 billion for local levels. Among the local units, metropolitan cities will receive Rs 11.74 billion, sub-metropolitan cities Rs 11.38 billion, municipalities Rs 143.10 billion, and rural municipalities Rs 154 billion.

Nepal Airlines Revenue Drops by 10 Percent in 10 Months: Nepal Airlines Corporation, the national flag carrier, has seen a 10 percent drop in revenue in the first 10 months (Shrawan to Baisakh) of the current fiscal year due to irregular income and weak leadership. Compared to the same period last year, revenue has declined by Rs 1.37 billion, pushing the corporation into losses exceeding Rs 1 billion. During the current fiscal year 2081/82 (2024/25), the airline earned Rs 11.76 billion from passenger service sales over 10 months. This revenue includes earnings from ticket sales and passenger cargo services. The corporation served 449,000 passengers during this period.

Credit Is the Largest Asset in Nepal’s Banking Sector; Private Sector Loans Total Rs 5.5 trillion: Loans are the largest asset on the balance sheets of all banks and financial institutions. In Nepal’s economy, which is currently valued at Rs 6.1 trillion, bank deposits had reached Rs 6.7 trillion as of the end of Falgun in the fiscal year 2081/82 (2024/25). During the same period, loans disbursed to the private sector amounted to Rs 5.54859 trillion. Of this total, wholesale and retail trade accounted for 19.1 percent, consumer loans for 19.8 percent, and industrial production for 16.4 percent. Additionally, the service industry received 8.6 percent, agriculture 7.7 percent, transport, communication, and public services 8.1 percent, and construction 4.2 percent of the credit.

Customs duty on some goods shifted from quantity-based to value-based: This time, the government has changed customs duty on some goods from quantity-based to value-based under the new budget. Previously, the government had imposed customs duty on imported alcohol based on volume. Now, it will be based on value. In general, customs revenue remains unaffected when duty is based on quantity, regardless of price fluctuations. However, when based on value, revenue also fluctuates with price. This increases the risk of under-invoicing.

Non-life microinsurance companies triple premium income and policies in one year: The total issued policies and collected premiums of the four existing non-life microinsurance companies in the country have nearly tripled compared to the same period last year. By the month of Baisakh in FY 2081/82 (2024/25), they collected Rs 767.95 million in premiums, up from only Rs 193.9 million the previous year. The four micro insurers had issued 308,376 policies by Baisakh, compared to only 85,545 the previous year.

Government revises liquor import duty rate day after budget: As in previous years, this year too the government revised tax rates the day after presenting the new budget. Deputy Prime Minister and Finance Minister Bishnu Poudel, in his budget speech on Jestha 15 (May 29), had proposed a 100% value-based customs duty on imported liquor like rum, whisky, and vodka, replacing the earlier quantity-based rate. Earlier, a flat customs duty of Rs 2,000 per liter was applied to all liquors, regardless of price. Arguing for a progressive tax policy—lower for cheap liquor and higher for expensive—the government replaced it with a value-based 100% duty. However, on Friday, the government changed the rates again, citing a printing error.

Delay in Marsyangdi Corridor 220 kV Transmission Line Risks Wasting 1,600 MW of Electricity: If the construction of the 220 kV transmission line under the Marsyangdi Corridor is not completed on time, up to 1,600 MW of electricity could go to waste. Due to delays in transmission line construction, electricity produced by hydropower projects in Lamjung and Manang that are nearing completion will be unutilized. According to the Nepal Electricity Authority’s 220 kV Transmission Line Project, the construction has been delayed due to various obstructions. In particular, work has been halted in parts of the Lamjung section due to lack of agreement on compensation and other local issues.

CNI welcomes budget as balanced and production-oriented: The Confederation of Nepalese Industries (CNI) has welcomed the upcoming fiscal year’s budget, calling it balanced and production-oriented. In a statement issued Sunday, the CNI said the budget promotes private investment and supports a dynamic economy. While noting that most of the private sector’s suggestions were incorporated in the budget, CNI urged effective implementation. “Budgets are usually good, but implementation is always weak. To achieve the targeted 6% economic growth, the relevant authorities must take responsibility for effective execution,” the statement said.

Petroleum import worth Rs 155.94 billion through Birgunj border in 10 months: In the current fiscal year’s 10 months, petroleum products worth Rs 155.94 billion were imported through the Birgunj checkpoint. The imports included diesel, petrol, liquefied petroleum gas (LPG), aviation turbine fuel (ATF), and kerosene. Compared to the same period last fiscal year, the total import value of all five petroleum types declined by Rs 1.35 billion, or 0.86%.

Thapa appointed CEO of Hydroelectricity Investment and Development Company: Prajesh Bikram Thapa has been appointed Chief Executive Officer (CEO) of Hydroelectricity Investment and Development Company Limited. The company’s board meeting held on Jestha 15 (May 29) appointed Thapa, with the appointment effective from Jestha 16 (May 30). He has been appointed for a term of four years, the company said.

Farmers unable to get minimum support price for Chaite paddy: Farmers have been unable to receive the minimum support price set by the government for Chaite paddy (paddy planted in the month of Chaitra in Nepal). Although the minimum support price was fixed at Rs 2,869 per quintal, the market price has fallen to as low as Rs 1,625 per quintal, and even then, the paddy is not selling and is rotting. This has discouraged farmers, the All-Nepal Farmers Federation said. Despite the official floor price being Rs 2,869 per quintal, the average market price is only Rs 1,625, and even at that price, the paddy is not selling.

Akabare chili price reaches record high: The price of Akabare chili has reached a record high in Diktel. It is being sold at Rs 1,000 per kilogram in the Diktel market. Traders in Diktel buy it from farmers in the villages at Rs 700–800 per kg and sell it to customers for Rs 1,000. Despite the high price, consumers are buying Akabare due to its taste and medicinal qualities. Indra Bahadur Shrestha from Khalte, Diktel Rupakot Majhuwagadhi Municipality–4, who cultivates off-season Akabare chili, said he currently sells 14–15 kg per week.

Motorable bridge construction begins over Dikhuwakhola near Diktel: Construction of a motorable bridge over Dikhuwakhola, a key shortcut connecting Diktel to various eastern Tarai districts, has begun. Funded by the Ministry of Physical Infrastructure of Koshi Province Government, the bridge is being built on the Diktel–Khanidanda–Regmitar section of the road. Due to the absence of a bridge, transportation across Dikhuwakhola—which lies at the border of Ward 4 (Khale) and Ward 15 (Bijaykharka) of Diktel Rupakot Majhuwagadhi Municipality—remained blocked for almost six months during the rainy season.

33 kV Substation Under Construction in Adanchuli Rural Municipality, Humla: A 33 kV capacity substation is being constructed in Kumna, Ward No. 1 of Adanchuli Rural Municipality, Humla. The project is being developed with investment from the Nepal Electricity Authority (NEA). The construction is part of the central electricity transmission line expansion. Currently, two 33/33 kV substations are under construction in Humla—one in the district headquarters Simkot and the other in Kumna of Adanchuli Rural Municipality.

Gold and silver prices rise in Nepali market on Monday: According to the Federation of Nepal Gold and Silver Dealers’ Association, on Monday the price of hallmark gold was fixed at NPR 189,800 per tola. Similarly, the price of silver per tola was fixed at NPR 1,990. Previously, on Sunday, the price of hallmark gold was NPR 188,800 per tola, and silver was NPR 1,995 per tola.