KATHMANDU: Nepal News presents today’s snapshot of Nepal’s economic activities. Get quick updates on major market movements, policy shifts, and financial developments shaping the economy of Nepal. Here are the key economic highlights for today:

NEPSE Falls 37.63 Points Amid Uncertainty; Hotels, Finance Hit Hard:

Nepal Stock Exchange (NEPSE) declined 37.63 points (1.39%) last week as political uncertainty ahead of the March 5 general election weighed on investor sentiment. The index opened at 2,708.70 on Sunday and closed at 2,671.07 on Thursday, fluctuating between 2,655.30 and 2,728.43. Sector-wise, only hydropower gained 0.32%, while hotels (-6.15%) and finance (-3.12%) led losses. Ridi Power recorded the highest turnover at Rs 2.71 billion; Khani Khola Hydropower surged 27.14%, and Kalinchowk Darshan fell 16.43%. Total turnover rose 12.87% to Rs 50.84 billion, but market capitalization dropped by Rs 63 billion to Rs 4.484 trillion.

Nepal’s IT Export Surges to NPR 1.45 Trillion, Paving the Way for a Digital Economy:

Nepal’s IT service exports have reached NPR 1.45 trillion, nearly doubling in three years, marking a historic milestone for the economy traditionally reliant on agriculture, tourism, and remittances. Driven by skilled, English-proficient youth and favorable time zones, the sector is increasingly competitive internationally. With government policies, the IT Investment Decade, and plans to create 500,000 jobs, Nepal aims to achieve NPR 30 trillion in exports over the next ten years. Key strategies include low taxation, AI adoption, IT promotion boards, local company prioritization, and infrastructure development. Coordinated efforts could transform IT into Nepal’s core economic pillar.

Bank Deposits Reach NPR 76.81 Trillion:

Nepal’s banking and financial system saw a significant surge in deposits during the first half of fiscal year 2082/83. Total deposits rose by NPR 4.17 trillion, reaching NPR 76.81 trillion, as sluggish private sector credit demand left banks with abundant liquidity. Despite the increase in deposits, lending to the private sector grew by only NPR 1.97 trillion, keeping excess funds within the banking system. This high liquidity contributed to a fall in loan interest rates, with commercial bank lending rates dropping to 7.12 percent and deposit interest rates declining to 3.56 percent.

Commercial Banks Ramp Up Share Loans as Demand from Other Sectors Slows:

With credit demand slowing in other sectors, Nepal’s commercial banks have aggressively increased lending to the stock market. As of mid-Poush FY 2082/83, 19 of 20 banks provided Rs. 129.68 billion in share loans, up 41.67% from Rs. 91.54 billion in the previous year. Nabil Bank led with Rs. 16.95 billion, a 34.45% increase, followed by Global IME Bank (Rs. 13.53B) and Kumari Bank (Rs. 10.18B). Seventeen banks increased their share loan disbursements, while Citizens and Nepal Bank reduced lending. Agriculture Development Bank recorded the highest growth rate of 280.13%. SBI Bank provided the least share loans during this period.

Commercial Banks Continue to Lower Deposit Rates Amid Weak Loan Demand:

In February, commercial banks in Nepal further reduced interest rates on individual fixed deposits, with the average maximum rate dropping to 4.57% from 4.68% in January. Nine out of 20 banks lowered rates, driven by rising liquidity exceeding NPR 12 trillion and weak private sector credit demand, while central bank policy rate cuts provided additional incentive. Only five banks offer rates above 5%, mostly on long-term deposits. Notable changes include Global IME Bank cutting its rate from 5.50% to 4.75%, while Siddhartha Bank and Everest Bank lowered rates to 4.25%. The trend reflects persistent liquidity growth and subdued loan appetite.

Non-Life Insurance Companies Invest Over Rs. 64 Billion Across Multiple Sectors in FY 2082/83:

Non-life insurance companies in Nepal have invested Rs. 64.28 billion across various sectors as of the second quarter of FY 2082/83 (Saun–Poush). According to the Nepal Insurance Authority, 14 operating companies allocated 72% of their investments—Rs. 46.51 billion—into term deposits with banks and financial institutions. Investments also include government savings bonds, listed company shares and debentures, mutual funds, and sectors like agriculture, tourism, hydropower, solar energy, education, and health. Among top investors, Rashtriya Beema led with Rs. 7.50 billion, followed by Siddhartha Premier (Rs. 6.98B), Sagarmatha Lumbini (Rs. 6.85B), and Neco Insurance (Rs. 6.24B). Remaining companies contributed varying amounts totaling the remaining Rs. 43.28 billion.

SEBON Introduces Stricter Rules for Margin Trading to Ensure Transparency and Investor Protection:

The Securities Board of Nepal (SEBON) has approved the “Margin Trading Facility Directive, 2082,” replacing the 2074 version, effective from Falgun 1, to regulate margin trading more securely and transparently. Under the new rules, only listed companies with at least 2.5 million shares, consistent profitability, and minimum two years post-IPO qualify. Investors must deposit at least 30% as initial margin, maintaining a minimum 20% throughout. Brokers must have a paid-up capital of NPR 20 crore, provide loans up to five times their net worth, and maintain strict limits per client. Daily mark-to-market reporting to SEBON is mandatory to enhance market transparency and liquidity.

Capital Spending Lags as Recurrent Costs Rise, Forcing Budget Downward Revision:

The government’s capital expenditure has remained weak in the first seven months of fiscal year 2025/26, reaching only 15.62 percent of the allocated budget by mid-February. Out of Rs. 407.88 billion earmarked for capital projects, just Rs. 63.72 billion was spent, a slower pace than the 19.42 percent recorded during the same period last year. Presenting the half-yearly budget review, the Ministry of Finance cited poor project preparation, land acquisition and forest clearance issues, and damage to infrastructure caused by the Gen Z movement as key reasons for the slowdown. In contrast, recurrent expenditure rose to Rs. 562.37 billion, accounting for 47.62 percent of the annual allocation. Total government spending reached Rs. 801.37 billion, exceeding income by Rs. 119.21 billion despite revenue growing 3.5 percent year-on-year. As a result, the government revised its annual expenditure estimate downward to Rs. 1,688.32 billion, projecting significantly lower capital spending and reduced revenue receipts by the end of the fiscal year.

Milk Economy Booms in Bagmati Rural Municipality, Bringing Rs. 15 Million Monthly:

Bagmati Rural Municipality in eastern Makwanpur is emerging as a strong local milk economy, with around Rs. 15 million flowing into the municipality every month from milk sales. Currently, about 6,500–6,650 litres of milk are collected daily through 11 milk producers’ cooperatives. To boost production, the municipality has invested Rs. 70 million as seed capital and Rs. 10 million in a moisture centre, benefiting 761 farmers with interest-free loans of Rs. 100,000 each. Additional support includes animal insurance and marketing responsibility through an agreement with Kharipati Dairy. Milk collection has more than doubled since 2023/24, making the municipality increasingly self-sufficient, with some farmers selling over 20 litres daily.

Farmer Schools Boost Skills and Commercial Farming in Sunsari:

The Agricultural Knowledge Centre, Sunsari has been running farmer schools across the district to develop skilled, professional farmers and promote commercial agriculture. Conducted directly in farmers’ fields, the programmes follow the entire crop cycle and emphasise hands-on learning. Farmers receive practical training in soil preparation, seed selection, planting, fertiliser use, pest and disease management, irrigation, and harvesting practices. According to officials, the approach has helped farmers become more self-reliant in vegetable and cereal production. Participants from Barahakshetra Municipality say the field-based, research-oriented learning has strengthened their ability to identify problems, experiment collectively, and apply modern farming techniques. The Centre aims to raise productivity by building farmers’ technical capacity through awareness and practical skills.

Locals Warn to Halt East–West Highway Expansion Over Urban-Standard Dispute in Pathari:

Residents of Pathari Shanishchare Municipality have warned they will stop the expansion of the East-West Highway unless it is built to full urban standards. Although earlier agreements—supported by the Asian Development Bank—envisioned a 50-metre-wide road in urban areas, locals allege construction has begun using narrower, semi-urban specifications. Discontent grew after a culvert was built at just 24 metres in the market stretch. Residents say this contradicts public hearings and later agreements to revise the design. While the project office is ready to expand the width to 44 metres, locals continue to demand 50 metres, citing safety, access, and parity with neighbouring municipalities.

JICA Nepal Brings Global Volunteer Agencies Together to Boost Grassroots Impact:

The JICA Nepal Office organised a joint gathering titled “Cross-National Volunteer Synergy: Enhancing Impact in Nepal”, bringing together nearly 100 representatives and volunteers from international Volunteer Sending Agencies (VSA). The event created a platform for volunteers to share field experiences, exchange ideas, and discuss common challenges in Nepal. Participants included volunteers and officials from organisations such as Peace Corps, KOICA, Voluntary Service Overseas, and the Australian Volunteers Programme. Marking 55 years of JICA’s Volunteer Programme in Nepal, the event highlighted decades of grassroots engagement, collaboration, and the contribution of 1,480 Japanese volunteers to Nepal’s development across multiple sectors.

Ghorahi–Tulsipur Four-Lane Road Takes Centre Stage in Dang Election Campaigns:

The long-delayed Ghorahi–Tulsipur road has re-emerged as a major election agenda in this year’s House of Representatives polls, with candidates from Dang constituencies 2 and 3 competing to claim credit for its progress. After years of stagnation, construction has accelerated following a new government-funded contract signed in July 2025 with Diva-Bandan Bhagwati JV. Leaders from CPN-UML, Nepali Congress and the Nepal Communist Party say their initiatives led to the cancellation of the previous contractor and revival of the project. The Rs. 2.52 billion, 21-kilometre four-lane road is scheduled for completion by 2028 and is now a key feature in party manifestos ahead of the election.

Nepal Oil Corporation to Build Provincial Fuel Storage Depot in Surkhet:

Preparations have begun to construct a provincial-level fuel storage depot in Surkhet to address long-standing fuel supply challenges in Karnali Province. The Nepal Oil Corporation has invited a tender worth around Rs. 140 million, targeting completion by fiscal year 2027/28. Currently, Surkhet lacks storage for diesel and petrol, relying on same-day tanker supplies from Nepalgunj. The new depot will store 280,000 litres of diesel and 140,000 litres of petrol, ensuring smoother distribution and better management during supply disruptions. Once completed, it will significantly strengthen fuel security across Karnali, which remains the only province without a dedicated fuel storage facility.

20 Construction Companies Blacklisted for One Year for Failing to Complete Projects on Time:

The Public Procurement Monitoring Office has blacklisted 20 construction companies for one year for failing to complete assigned projects on schedule. Announced on Saturday, the decision follows submissions from various agencies requesting inclusion of these firms under Section 63(1) of the Public Procurement Act, 2063. During the one-year period, the blacklisted companies will be prohibited from participating in any public procurement activities. Among the affected firms are PN D. Sherpa Construction, Pavitra Multiple Construction, Om Ganesh Construction Service, Changarasi Construction Service, DP Kandel Construction Service, Prithvi Construction Service, Himdung & Thokar JV, Hira & Namita JV, and others across Kathmandu, Bhaktapur, Dhading, Chitwan, and Nuwakot.

Most “National Pride” Projects in Nepal Lag Decades Behind Schedule, Only a Few Completed:

Nepal’s “National Pride” projects, meant to be completed within 10 years and costing at least Rs 50 billion each, are largely delayed. Of 27 designated projects, only four—including Upper Tamakoshi Hydropower, Gautam Buddha International Airport, and Pokhara Regional International Airport—have been completed; 23 remain behind schedule, some decades overdue. Causes include politically influenced project selection, lack of scientific planning, insufficient budget allocation, and land or resource disputes. Major infrastructure, transport, irrigation, and water projects show minimal progress, with financial outlays failing to yield results. Experts call for stricter project evaluation, prioritization, and effective monitoring to prevent long-term failures.

Rising Financial Crimes Urge Stronger Supervision, Says Nepal Rastra Bank Governor:

Nepal Rastra Bank Governor Prof. Dr. Bishwanath Paudel warned that financial crimes using advanced technologies are rapidly increasing, emphasizing the need for a well-resourced and effective supervisory mechanism. Speaking at an international conference on anti-money laundering and financing terrorism, he stressed proactive strategies over reactive measures, urging preparation against potential risks. While Nepal’s inclusion on the FATF “grey list” is challenging, Paudel called it an opportunity to strengthen the country’s anti-money laundering system. He highlighted that financial crimes divert funds from critical sectors like health and education and exacerbate social inequalities. Officials from India, Sri Lanka, Bangladesh, and Mongolia also attended.

Department of Electricity Development Grants Survey Permits for 9,787 MW of Renewable Energy Projects:

The Department of Electricity Development has issued survey permits for 220 renewable energy projects totaling 9,787 MW across Nepal, including hydropower, solar, wind, and co-generation sectors. Hydropower dominates with 202 projects generating 9,675 MW, while 12 solar projects (84.4 MW) and five wind projects (25 MW) have also received permits. Co-generation is represented by Reliance Sugar & Chemicals in Bara, though its 15 MW permit has expired and only 3 MW is under development. Currently, only solar and hydropower projects are nearing grid connection, while wind projects remain unbuilt. Survey permits aim to streamline renewable energy development nationwide.

Nepal Telecom Authority Spends Only 11% of Budget in First Half of FY 2082/83:

Nepal Telecommunication Authority (NTA), the sole regulatory and development body for telecom in Nepal, spent only 11% of its Rs 78.35 crore budget in the first six months of FY 2082/83. Over the past few years, the authority’s expenditure progress has remained low, reflecting leadership and staffing challenges. Key telecom operators, including Nepal Telecom and Ncell, have complained of delayed approvals and lack of facilitation, impacting service expansion and foreign currency transactions. Past projects, such as the Smart Telecom license takeover, remain unresolved even after three years. Limited staff and administrative inefficiencies continue to hinder effective budget utilization and sector support.

Bank Founders Still Unable to Sell Shares to Public Despite BAFIA Provision:

Despite BAFIA’s provisions, founders of Nepalese banks and financial institutions remain unable to sell their shares to the public even a decade after the law was enacted. The law allows phased conversion of founder shares into public shares after 10 years of operations, but the central bank has yet to implement it. Experts, including the Banking Reform Committee, urge the gradual enforcement of this mechanism to free blocked capital and separate bankers from business owners. The proposed BAFIA amendment also restricts directors with significant loans from holding controlling shares, aiming to reduce conflicts of interest and strengthen financial governance.

Remote Villages in Suddha Kumakh Receive Electricity as Nepal Electricity Authority Expands Distribution:

Around 300 households in Chade, Karenji, and Kharban villages of Suddha Kumakh Rural Municipality–4, Salyan, have received electricity through three new transformers and extended distribution lines installed by the Nepal Electricity Authority. The service was inaugurated by the rural municipality chair Bharat Giri, alongside officials from the Salyan Distribution Center and local representatives. While some households have already installed meters, others are preparing for connection. The electrification will enable residents to use household appliances, run rural industries, and power electric motors for irrigation in fertile orange farms. Local officials highlighted cooperation among authorities, construction teams, and the community as key to overcoming long-standing energy access challenges.

Gagan Thapa Unveils Comprehensive Plan to Transform Nepal’s Public Transport and Road Safety:

Nepali Congress President Gagan Thapa has proposed a detailed roadmap to overhaul Nepal’s public transport and improve road safety. Citing daily fatalities of seven people and a GDP loss of three percent from accidents, Thapa emphasized the need to modernize outdated transport laws. His plan includes establishing a strong Transport Authority with government, worker, and expert representation, implementing scientific route planning, integrated ticketing, and prioritizing mass transit in cities like Kathmandu. The proposal stresses citizen-centric urban design, road safety education from school, use of technology, and social protection for transport workers, aiming to reduce accidents and enhance commuter experience.

Modi Khola Faces Water Shortage as Hydropower Plants Fail to Release Legal Flow:

Modi Khola in Parbat district is facing a severe water crisis as four hydropower plants—Modikhola (14.8 MW), MadhyModi (15.8 MW), Lower Modikhola (20 MW), and Lower Modi ‘A’ (10 MW)—have not been releasing the legally mandated minimum 25% natural flow. The blockage has affected aquatic life, including the famous Asala fish, and disrupted local livelihoods along a 12-kilometer stretch from Naya Pul to Chuwa. Despite repeated requests from Modi Rural Municipality to comply with water release regulations, hydropower operators have ignored directives. Villagers warn that continued prioritization of electricity production over environmental flow risks long-term ecological and community harm.

Reliance Spinning Mills Challenges NEPSE Opening Price, Calls It Unfair:

Reliance Spinning Mills Limited has expressed dissatisfaction with the Nepal Stock Exchange’s (NEPSE) opening price range of Rs. 100–300 per share for its initial listing. In a press release, the company called the range impractical and discriminatory, arguing it does not reflect the actual market value established through book-building. Qualified institutional investors bid Rs. 608–912 per share during the book-building process, with a 10% discount for the public fixing the price at Rs. 820.80. Reliance Spinning Mills noted its per-share net worth of Rs. 490.54 as of mid-FY 2081/82, urging investors to base decisions on real financials and projections.