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:

Supreme Court Halts Dolma Impact Fund Tax Exemption, Citing Legal Conflicts:

The Supreme Court has temporarily blocked the interim government’s decision to grant tax exemptions to the Mauritius-registered Dolma Impact Fund, citing conflicts with Nepal’s Income Tax Act 2002 and Treaty Act 1990. The division bench, led by Justices Mahesh Sharma Poudel and Bal Krishna Dhakal, continued a prior interlocutory order following a writ petition by lawyer Bhesh Raj Luitel. The exemption, granted under the Nepal-Mauritius Double Taxation Avoidance Agreement (DTAA), could have cost Nepal Rs 12–15 billion in foregone taxes, as Dolma has invested over $100 million in Nepali firms, including hydropower, healthcare, and tech companies. The court emphasized that treaties lack legal validity without parliamentary ratification, meaning domestic law prevails if conflicts arise. Dolma’s Mauritius entity, described as a “shell company,” sought exemptions on dividends and capital gains, though similar arrangements have previously triggered scrutiny under the Panama Papers revelations. The interim order ensures government revenue protection while the matter undergoes final judicial review.

Nepal’s Budget Spending Hits 40.8% by Mid-Magh, Capital Expenditure Lags:

By the end of Magh 2082, Nepal has spent 40.8% of its Rs 1,964 billion annual budget, totaling Rs 801.37 billion. Current expenditure leads at 47.62% of Rs 1,180.98 billion, while capital spending remains critically low at 15.62% of Rs 407.89 billion. Financial management outlays have reached 46.71% of the allocated Rs 375.24 billion. On the revenue side, only Rs 682.17 billion—or 44.49% of the annual target—has been mobilised, with tax revenue at 45.21% and non-tax revenue at 42.55%. Foreign aid receipts lag at 24.02% of the target, highlighting challenges in budget execution and development implementation.

Got it — not all 22 ministries, but 22 ministries failed to spend half of their budgets. Here’s the corrected version:

22 Federal Ministries Spend Less Than Half of Budget in First Six Months, Finance Ministry Reports:
Nepal’s Finance Ministry reports that 22 federal ministries were unable to spend 50% of their allocated budgets during the first six months of the fiscal year. Among them, the Ministry of Urban Development had the lowest expenditure at 6%, while the Ministry of Foreign Affairs led at 56%. Defense, Agriculture, Land Management, Finance, Health, and the Prime Minister’s Office also showed low budget utilization. Officials attribute the delays to government transitions, the Gen-Z protests that disrupted infrastructure, and bureaucratic slowdowns. Finance Minister Rameshwar Khanal expects spending to pick up as the new government stabilizes and operations resume.

National Audit Finds All Provinces and Majority of Local Governments Underperforming in Public Service:

The National Natural Resources and Fiscal Commission’s evaluation reveals that all seven provinces and most local governments in Nepal have performed poorly. No province scored above 50, while 190 local bodies also fell below this benchmark; only 72 of 753 local governments scored above 70. Madhesh Province scored lowest at 27.28, with Kathmandu Metropolitan showing weak municipal performance at 44.97, despite high-profile leadership. Many provinces failed to implement air quality and conditional grant measures. Delays in budget submission were noted in municipalities including Kathmandu. Overall, the report highlights systemic weakness in governance, service delivery, and development implementation at provincial and local levels.

Over a Quarter of Economic Programs See No Progress as Capital Spending Lags:

More than 27% of government economic programs recorded no progress in the first half of fiscal year 2025/26, according to a Confederation of Nepalese Industries (CNI) report. Of 74 programs under economic sectors, only nine were fully implemented, while 45 showed partial progress. Energy, infrastructure, and urban development programs were similarly weak, with three of 14 fully completed. Overall capital spending remained low at 11.66% of Rs 407.89 billion. CNI officials warned that private sector investment relies on government spending. Government authorities cited inadequate project preparation and deviations from National Planning Commission guidelines as key reasons for poor implementation.

Insurance Companies Boost Stock Market Investments to NPR 52.62 Billion:

Nepal’s insurance companies have significantly increased stock market investments, reaching NPR 52.62 billion by mid-second quarter of FY 2025/26, up 57.87% from NPR 33.34 billion last year. Life insurers invested NPR 42.40 billion, led by Himalayan Life with NPR 12.47 billion, while 12 non-life insurers contributed NPR 5.36 billion. Micro and reinsurance companies also raised equity exposure. Falling bank interest rates and expanded investment limits prompted insurers to shift funds from fixed deposits to shares. Sanima Reliance Life and United Ajod Insurance recorded the highest growth in investments among life and non-life insurers, respectively.

Life Insurers’ Profits Dip Slightly to NPR 3.32 Billion in H1 FY 2025/26:

Life insurance companies in Nepal earned a combined net profit of NPR 3.32 billion by the second quarter of FY 2025/26, down 4.73% from NPR 3.48 billion in the same period last year. Among 14 life insurers, nine reported moderate profit growth while five experienced sharp declines. Reliance Nepal Life led profits at NPR 395.8 million, up 12.98%, while Nepal Life saw a 28.03% drop to NPR 336.9 million. Falling bank interest rates, limited returns from equity investments, and slow stock market growth have constrained overall profitability. EPS for half the insurers fell, with Reliance Nepal Life posting the highest EPS at NPR 15.24.

Microfinance Institutions’ Profits Surge 89% Amid Falling Bank Interest Rates:

Profit earnings of Nepal’s microfinance institutions (MFIs) jumped 89.10% in the past year, driven by lower borrowing costs following a steep drop in bank interest rates. According to Nepal Rastra Bank (NRB) data, 50 MFIs posted a combined net profit of Rs 4.79 billion by mid-January 2026, compared to Rs 2.53 billion in the same period last fiscal year. Chhimek Laghubitta Bittiya Sanstha led with Rs 576.09 million, up 12.55%, while Deprosc earned Rs 442.91 million, rising 80.30%. The surge reflects banks’ reduced lending rates—from roughly 10% to nearly half—boosting MFIs’ profitability despite stagnant loan investment growth.

Nepal Poised for UN-Backed Graduation to Developing Country Status by November 2026:

Based on a UN assessment, Nepal is set to graduate from a least-developed to a developing country, with a final decision scheduled for November 26, 2026. The United Nations’ evaluation follows detailed studies, particularly after stakeholder requests, including from the Federation of Nepalese Chambers of Commerce and Industry, to review the timeline. Of the three graduation criteria, Nepal had already met two by 2021. Officials note that while trade preferences may decrease post-graduation, direct foreign investment inflows are expected to rise. Preparations by the government are ongoing, and the final status will be confirmed once the UN presents its report.

LPG Shortage Hits Kathmandu Kitchens Amid Supply Chaos:

Despite government claims of sufficient LPG supply, Kathmandu households face severe cooking gas shortages. Consumers report waiting 15–20 days to obtain a cylinder, with long queues outside depots and shops. Some traders exploit the scarcity, forcing buyers to purchase new cylinders at inflated prices of NPR 4,000–5,000. Nepal Oil Corporation (NOC) has started direct sales from its Teku office, yet hours-long waits persist. Authorities cite surging demand—up to 400% above normal—hoarding by consumers, import delays from India, tender processes, and seasonal disruptions as primary causes. Analysts warn supply-demand imbalance may continue for 10–20 days.

NEPSE Recognizes 110 Companies as Stock Dealers to Stabilize Market:

The Nepal Stock Exchange (NEPSE) has approved 110 listed companies to operate as stock dealers, enabling them to buy and sell securities and act as market makers to reduce volatility in the secondary market. The updated list includes 19 commercial banks, 10 development banks, 22 microfinance companies, 10 life insurers, 11 non-life insurers, 6 investment firms, and 24 hydropower companies. Additionally, two companies each from finance, hotels and tourism, manufacturing, and other sectors were included. NEPSE’s move aims to strengthen liquidity and stability in Nepal’s capital market by involving a wide range of financial and corporate players.

NEPSE Shifts IPO Pricing to Face Value, Sparking Investor and Issuer Concerns:

Nepal Stock Exchange (NEPSE) has changed its IPO pricing method, now setting price ranges based on face value rather than multiples of net worth for companies with positive net worth. The move follows challenges in pricing Reliance Spinning Mills’ IPO. Under the new policy, NEPSE set a first-trade price range of NPR 100–300 for Reliance Spinning Mills and Salpa Bikas Bank, despite higher institutional bid prices. Reliance has criticized the approach, arguing it undervalues the IPO, undermines institutional projections, and does not reflect market realities. The shift has raised concerns over investor confidence and the credibility of NEPSE’s pricing method.

Upper House Passes Integrated Tourism Bill with Stricter Everest Regulations:

Nepal’s National Assembly has passed the Integrated Tourism Bill, introducing stricter rules for mountaineering, enhanced safety and insurance requirements, and a permanent environment fund to clean high-altitude regions including Mount Everest. The legislation mandates recent health certificates for climbers, experience prerequisites for Everest aspirants, and clear expedition permit rules. It also formalizes mountain garbage fees, converts them into a non-refundable fund for long-term cleanup, and strengthens insurance and rescue provisions. The bill now moves to the House of Representatives, post-March 5 elections, and, after passage and presidential authentication, could take at least three months to become law.

Nepal Rastra Bank Flags Loan Risks, May Require Large Banks to Boost Provisions:

Nepal Rastra Bank (NRB) has highlighted potential risks in the loan portfolios of ten major commercial banks following a quality review by Bangladeshi consultant Houladar Yunus & Co. The review found gaps in loan classification and provisioning, prompting NRB to consider additional risk provisions. Average non-performing loans among the banks ranged from 4–11%, with some exceeding 10%. Banks under review include Global IME, Nabil, NIC Asia, and others. NRB’s classification rules mandate specific provisioning for loans based on their risk category, from 1% for performing to 100% for bad loans. Further action will follow banks’ clarifications.

Nepali Sona Shrestha Appointed ADB South Asia Director, Set to Strengthen Regional Development:

The Asian Development Bank (ADB) has appointed Nepali national Sona Shrestha as Director General for its South Asia Department. She will oversee strategy and program implementation across Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka. With 23 years of ADB experience—including leadership roles in South Asia, Southeast Asia, and independent evaluation—Shrestha brings extensive international expertise. A PhD and master’s in economics from the University of California and a bachelor’s from Smith College, she emphasizes inclusive, sustainable development and closer collaboration with member countries. ADB, headquartered in Manila with 69 member nations, has long supported Nepal’s infrastructure, education, and health projects.

Bharatpur Airport to Begin Aircraft Refueling from February 18, Boosting Flight Capacity:

From February 18, planes flying from Bharatpur Airport to Kathmandu and Pokhara will be able to refuel on-site, Nepal Oil Corporation (NOC) has announced. Two refuelers and a mobile dispenser will be installed initially, with full infrastructure taking six months to a year. The 30-kiloliter fuel depot will cost around Rs 4–5 crore. Currently, Buddha Air operates seven daily flights using two 47-seat and five 72-seat aircraft. With refueling available, planes can carry two extra passengers per flight. The arrangement is expected to improve operational efficiency, reduce dependency on Kathmandu fuel supply, and benefit both airlines and passengers.

Supreme Court Clearance Opens Way to Forfeit Rs 3.6 Billion Guarantee of Sun Koshi Marine Diversion Project Contractor:

The government can now forfeit Rs 3.6 billion in performance and advance guarantees deposited by Patel Raman JV, the contractor of the Sun Koshi Marine Diversion multipurpose project, after the Supreme Court declined to continue its earlier interim order. The JV had received the contract to construct the headworks, powerhouse, gates, and hydro-mechanical installations but achieved only 10% physical progress despite completing 61% of the contract period. The government terminated the contract in Mangsir 8 due to delays. The project, estimated at Rs 49.42 billion, aims to generate 31 MW of electricity and provide irrigation across five Madhesh districts.

Finance Minister Stresses Timely, Equal Information Flow for Market Efficiency:

Finance Minister Rameshwar Khanal emphasized that proper economic functioning requires timely and equitable information dissemination. Speaking at a media rights event in Kathmandu, he highlighted how unequal access to information creates market imbalances, particularly in the capital and commodity markets, where delayed updates on gold and silver prices affect profits. Khanal noted that insider trading allows some individuals to monopolize crucial information, disadvantaging others. He also stressed that while accounting standards require companies to disclose social and economic impacts, journalists’ limited monitoring prevents full transparency. Ensuring equal access to accurate information remains critical for fair competition and informed citizenry in Nepal.

Bagmati Edition of “Code for Impact” Hackathon Selects Semifinalists for National Incubation Phase:

The provincial stage of the “Code for Impact: US–Nepal Tech Innovation Hackathon” concluded in Kathmandu on Wednesday, completing Phase 2 of the youth-led tech programme. Hosted at Aloft Hotel with US Embassy Chargé d’Affaires a.i. Scott Urbom in attendance, the Bagmati edition selected two semifinalist teams to advance to Phase 3 — a structured mentorship and incubation phase ahead of the National Showcase in June 2026. Supported by the US Embassy in Nepal, and led by Aadyanta Advisory in partnership with AmCham Nepal and Aadhyanta Fund Management, the initiative has engaged nearly 175 innovators nationwide, guiding young founders from concept development to scalable prototypes.

New Government to Inherit Rs 17 Billion in Contract Liabilities, Finance Ministry Highlights Oversight Measures:

Nepal’s Finance Ministry warns that the government formed after the House of Representatives election on March 5 will inherit around Rs 16–17 billion in contract obligations from previous projects. Minister Rameshwar Khanal stated that computerized accounts alone show Rs 80 billion in contract payments due, with another Rs 15 billion outside the system. The ministry has restricted new multi-year projects to avoid further liabilities. Past interim governments had terminated 66 long-delayed contracts worth Rs 3.86 billion out of Rs 18.33 billion in total. Procedures now require multi-year project approvals based on medium-term budget frameworks and priority assessment to ensure accountability and timely execution.

Koshi Province Advances 50 Investment Projects Following Last Year’s Summit:

Following the last year’s investment summit organized by Koshi Province, 50 of the 51 projects with signed memorandums of understanding have entered the implementation phase. The summit, the first of its kind in Nepal’s provinces, secured investment commitments totaling NPR 1.5738 trillion across 51 projects. Chief Minister Hikmat Kumar Karki stated that the provincial government will review progress every three months to ensure commitments move toward execution. Post-summit discussions with investors addressed both individual and collective concerns, including legal hurdles, aiming to resolve issues and accelerate project rollout across sectors, signaling a significant push for provincial economic growth.

Land Compensation Dispute Threatens Halt of South–North Railway Construction in Bardibas:

Construction of the South–North Railway from Jayanagar through Janakpur to Bardibas faces potential delays as local farmers protest unpaid land compensation. Bardibas-area farmers, waiting over 1.5 years, allege unresponsive and rude treatment by the Railway Department and threaten to halt work and stage demonstrations in Kathmandu. Previous agreements between the department, municipality, and farmers have failed to progress, leaving platforms and railway links incomplete. Farmers report even non-acquired land being used for construction materials without consent. The department’s lack of urgency in compensating 14 households, along with technical issues in compensation, has escalated tensions, putting the project at risk of delay.

Decline in Freight Trains at Sirsiya Dry Port Raises Concerns for Nepal’s Trade:

Freight train traffic at Sirsiya Dry Port in Birgunj has declined over the first six months of the current fiscal year, affecting import-export operations, delivery timelines, and costs. Data from the Intermodal Transport Development Committee shows 572 freight trains operated from Shrawan to Poush, down from 588 in the same period last year. Monthly averages fell below 85 trains, compared to 90–105 previously. Traders cite India-side rail management issues, technical obstacles, and delayed train availability. The slowdown risks Nepal’s competitiveness in international markets. Port authorities claim recent improvements, but container congestion persists, exceeding the facility’s 1,600-container handling capacity.

Nepal’s Households Well-Connected but Digital Skills Remain Weak, Survey Finds:

A recent survey by Nepal’s National Statistics Office reveals that while 85.1% of households have smartphones and 82% access the internet, digital literacy and technical skills remain critically low. Only 16.8% own computers, 10.2% can use spreadsheets, and 3.1% can program. Skills for device handling, presentations, privacy settings, and online security are under 25%. Gender and economic gaps are evident: 69.7% of men have at least one digital skill versus 48.8% of women; internet access is 99.2% in the wealthiest households but just 52.9% in the poorest. Urban areas and Bagmati province show higher access than rural regions and Karnali.

Long-Awaited Water Supply Brings Relief and Hope to Salyantar, Dhading:

Salyantar in Dhading, long plagued by water scarcity, is now receiving a steady supply through the Manpang-Salyantar Drinking Water and Sanitation Project. After years of fetching water from streams and wells, around 2,300 households in Tripurasundari Rural Municipality-1 and 2 now enjoy piped water from six newly built tanks. The project, spanning 15 km from the Manpang River, cost NPR 27 crore and is 70% complete, with distribution lines and structures still being finalized. Locals celebrate easier daily life, improved sanitation, irrigation potential, and hopes for better agricultural productivity, though concerns about long-term sustainability remain.

Nepalese Rose Demand Soars on Valentine’s Week, Shortage Likely:

Valentine’s Week in Nepal, culminating on February 14, sees a surge in rose consumption, with the Floriculture Association of Nepal estimating 450,000 rose sticks will be sold nationwide. The Kathmandu Valley alone will consume 270,000 sticks, while other districts account for 180,000. Only about 30% of demand will be met through local production due to the winter season, leaving a 70% shortfall that may rely on informal imports. Total rose trade during the week is projected at NPR 56.2 million, with per-stick prices ranging from NPR 100–150. The Valley consumes 60% of the flowers, highlighting heavy regional demand.

Economic Reforms, Industrial Policy, and Investment Protection Highlighted in Election Manifestos:

Nepal’s upcoming election manifestos reveal a strong economic focus, particularly on structural reforms and industrial policy. The Nepali Communist Party emphasizes boosting production, creating jobs, and ensuring financial inclusion, with private-sector investment protection prioritized over state-led industrial expansion. Janata Samajbadi Party targets banking reform, proposing a shift from profit-driven to public-interest-oriented institutions, though without clear implementation details. Rastriya Janamorcha pledges to restrict foreign and speculative capital in domestic industries. Across the board, manifestos underline the need for economic restructuring, industrial growth, and investment protection, but actionable strategies to tackle Nepal’s current economic challenges remain largely unspecified.

Borrowers Protest Against Rastriya Banijya Bank Over Gold-Silver Loan Valuation:

Borrowers who pledged gold and silver for loans have launched protests against Rastriya Banijya Bank, opposing the bank’s decision to value collateral based on September 9, 2025 prices rather than current market rates. With gold prices now exceeding NPR 300,000 per tola, customers argue the old valuation causes losses of up to NPR 100,000 per tola. The dispute follows a violent incident on September 9, when bank branches nationwide—including Baneshwor—were vandalized, resulting in theft of 18 kg of gold and NPR 5.15 crore in cash. The bank has temporarily suspended the repayment process, while negotiations continue.

Gold and Silver Prices Drop in Nepal: Gold Falls Rs 3,000 per Tola:

On Friday, gold prices in Nepal declined by Rs 3,000 per tola, trading at Rs 303,500, down from Rs 306,500 on Thursday, according to the Federation of Nepal Gold and Silver Dealers’ Association. Silver also fell by Rs 340 per tola, reaching Rs 5,000 from Rs 5,340.