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:

Nepal Capital Spending Remains Weak As Budget Execution Lags Behind Targets

Nepal’s capital expenditure performance continues to remain weak. Over the past five fiscal years, annual capital spending has never reached Rs 250 billion, with figures including Rs 222 billion last year, Rs 191 billion the year before, and between Rs 216–233 billion in earlier years. In all cases, spending has remained below 65% of annual targets. Economists say that to meet the Rs 2.124 trillion budget introduced by Finance Minister Swarnim Wagle, capital spending would need to nearly double from current levels. While revenue targets may be difficult to achieve, experts argue that improving administrative efficiency could make capital expenditure targets more realistic.

Social Security Fund Prioritises Investment in Hydropower and Renewable Energy

The Social Security Fund has identified priority sectors for investment through loans or co-financing, including hydropower projects, electricity transmission lines, solar energy, and industries producing renewable energy. As of June 3, the fund had accumulated contribution deposits worth Rs 111.07 billion. With contributions increasing on a daily basis, the fund has concluded that it needs to expand the scope of its investments. Based on this, the fund has adopted a policy of investing in hydropower and renewable energy projects in partnership with government-owned companies.

Nepal to Receive Additional Rs 6.5 Billion IMF Loan

Nepal is set to receive an additional loan of around Rs 6.5 billion from the International Monetary Fund (IMF) under the Extended Credit Facility (ECF). The IMF Executive Board completed the seventh and final review under the ECF programme, making Nepal eligible for the final tranche of the loan. The final instalment will be released after Nepal implemented reform programmes agreed under the facility and in accordance with IMF conditions. Under this arrangement, Nepal will receive SDR 31.32 million, equivalent to approximately USD 42.9 million.

EOI Invited for DPR of 27.5-Km Kathmandu Rail Route

The Rail, Metro Rail and Monorail Development Project has invited an international Expression of Interest (EOI) to prepare the Detailed Project Report (DPR) for a 27.5-kilometre rail route connecting major locations in Kathmandu. It is believed that the completion of this project would bring a major transformation to Kathmandu’s transport sector. Due to rapid urbanisation, narrow roads, and the growing number of vehicles, travel within the Kathmandu Valley has become increasingly difficult. Commuters are often forced to spend hours in traffic jams while travelling from Ratnapark to Narayangopal Chowk or Satdobato. The construction of this 27.5-kilometre rail route is expected to permanently address those problems.

Government Plans to Borrow Nearly Rs 250 Billion in Foreign Loans

The government plans to borrow nearly Rs 250 billion in foreign loans in the fiscal year 2026/27. In the budget presented on May 29, Finance Minister Dr. Swarnim Wagle stated that the portion of the Rs 2.124 trillion budget that cannot be covered through revenue sources will be financed through borrowing. Of this amount, Rs 247 billion is expected to come from foreign loans. The largest share of these foreign loans will be borrowed from the Asian Development Bank (ADB). The government plans to borrow Rs 116 billion from the ADB. Such financing also includes grant assistance.

Government Cuts Home Ministry Budget by Nearly Half

The government has made a substantial reduction in the budget allocated to agencies under the Ministry of Home Affairs for the upcoming fiscal year. The reduction is 48.25 percent compared to the budget allocated in the previous fiscal year. The government had allocated Rs 208.62 billion for the current fiscal year. However, only Rs 107.95 billion has been allocated for the upcoming fiscal year. This is Rs 100.76 billion less than the current fiscal year’s allocation.

Budhigandaki Dam Height to Be Reviewed Before Construction Begins

The height of the dam for the 1,200-megawatt Budhigandaki Reservoir Hydropower Project, a national pride project, is set to be reviewed before construction begins. A final design prepared in 2015 proposed the construction of a 263-metre-high curvature arch dam to block the Budhigandaki River, which flows along the border of Gorkha and Dhading districts. Now, 11 years later, preparations are underway to review the dam’s height before construction starts. The project aims to begin construction in 2028. Before that, authorities intend to conduct a fresh review of the dam’s height.

Growth of Manufacturing Industries Remains a Concern

The development and expansion of manufacturing industries in Nepal appear to be a matter of concern. Government statistics show that the sector has expanded at an extremely slow pace in recent years. The development and expansion of manufacturing industries are essential for making the country self-reliant, utilising resources effectively, and creating adequate employment opportunities. The National Statistics Office has projected Nepal’s economic growth rate at 3.85 percent in the current fiscal year 2025/26. However, the growth rate of the manufacturing sector is estimated at only 2.83 percent.

Over 145,000 Agricultural Insurance Policies Issued In First 10 Months Of Fiscal Year

A total of 145,862 agricultural and livestock insurance policies have been issued in the first ten months of current fiscal year, according to data from the Nepal Insurance Authority. Insurance companies collected a total premium of Rs 1.57 billion during the period. Of this, Rs 1.13 billion, or 72.45 percent of the total premium, came from policies eligible for the government’s 80 percent premium subsidy. The share of policies qualifying for a 65 percent subsidy—covering insured amounts ranging from Rs 5 million to Rs 10 million—remained relatively small, the data show.

Informal Workers Face Wage Exploitation, Study Finds

Workers employed in Nepal’s informal sector are facing injustice in receiving their wages, a study has found. A study conducted in the informal labour sector found that 73.4 percent of workers receive only partial wages. It also found that 66.2 percent are made to work merely on the promise that they will be paid later. ActionAid, which has been working for informal sector workers, carried out the study between March and May 2026 in Bardiya, Surkhet, Kanchanpur, Doti, Dadeldhura, Kapilvastu, Chitwan, Makwanpur, Bara, Parsa, Mahottari, Dhading, and Kathmandu.

Distressed Cooperatives Committee Publishes List of Major Defaulters

The Office of the Problematic Cooperative Management Committee under Bagmati Province has published the list of major borrowers of five troubled cooperative institutions. Following a decision taken by the committee on Friday, the names of 114 major borrowers of Laligurans Saving and Credit Cooperative Limited, Sumeru Saving and Credit Cooperative Limited, National Namobuddha Saving and Credit Cooperative Institution Limited, Darshan Saving and Credit Cooperative Institution Limited, and Civil Saving and Credit Cooperative Limited were made public.

Nepal Issues 1,195 Permits For 31 Peaks, Earns Rs 1.26 Billion In Spring Climbing Season

A total of 1,195 climbers have obtained permits to scale 31 Himalayan peaks during Nepal’s spring 2026 mountaineering season. The Department of Tourism’s Mountaineering Branch reported that the country collected Rs 1.2647 billion (about USD 8.47 million) in royalties during the period from 1 March to 1 June 2026. Among the climbers, 908 were men and 287 were women, arriving from 79 countries. They formed 149 expedition teams, all permitted to climb various Himalayan peaks in Nepal.

Sudurpashchim Government Nears Final Stage Of Budget Preparation

The Sudurpashchim Provincial Government is in the final stages of preparing its budget for the upcoming fiscal year, as it is legally required to present the budget to the Provincial Assembly on June 15. All ministries are currently finalising their budget proposals. The provincial government’s budget for the current fiscal year stands at Rs 33.45 billion. The budget for fiscal year 2026/27 may be smaller because the province has received a reduced allocation from the federal government. Priority is being given to incomplete projects that are yet to be completed.

Rising Heat Reduces Foreign Tourist Arrivals In Lumbini, Indian Visitors Increase

Extreme heat has reduced arrivals of third-country tourists in Lumbini, while Indian tourist activity has increased. In May last year, 2,600 foreign tourists from third countries visited Lumbini, but the number has slightly declined this year. Chinese visitors accounted for the largest share at 978, followed by Sri Lanka (238), Vietnam (163), and the United Kingdom (113), with arrivals from other countries remaining below 100.

Government Invites Applications For Five Vacant Nepal Tourism Board Executive Committee Posts

The government has called for applications to fill five vacant positions on the Executive Committee of the Nepal Tourism Board. In a notice published on Friday, the Ministry of Culture, Tourism and Civil Aviation invited interested candidates to submit their biodata within five days.

Government Reiterates Karnali Tourism Decade Plan Amid Ongoing Implementation Gaps

The government has reiterated plans to launch a “Karnali Tourism Decade” to promote tourism based on the region’s unique identity. The initiative aims to market the slogan “Nepal’s destination is Karnali” in international markets, especially India and China, alongside improving tourism information centres. Plans such as startup loans for youth entrepreneurship and the establishment of business incubation centres have been repeated from previous budgets, while service delivery reforms continue to face implementation challenges.

Fertiliser Shortage Forces Bardiya Farmers to Cross Border into India

Although the season for preparing paddy seedlings has begun, farmers in Bardiya are being forced to travel to Indian markets due to the lack of necessary fertilisers. Unable to obtain urea and DAP fertilisers, farmers have started heading to Indian markets along the Nepal–India border. Farmers complain that they are compelled to cycle for hours to reach border markets in search of fertilisers. The district has around 110,447 hectares of cultivable land. Of this, paddy cultivation is carried out on approximately 50,100 hectares.

Farmers In Mahottari Face Fertiliser And Irrigation Shortage During Peak Rice Planting Season

With the main rice planting season underway, farmers in Mahottari district are facing serious difficulties due to shortages of fertiliser, quality seeds, irrigation facilities, and agricultural infrastructure. Farmers say delays in the supply of essential inputs are affecting cultivation, raising concerns that paddy production could decline significantly this year. In areas including Aurahi, Gaushala, Bardibas, Balwa, Loharpatti, Jaleshwar, and Matihani, farmers are busy with rice transplantation and nursery preparation. However, limited access to chemical fertilisers has forced many to purchase them from private markets at higher prices.

Nabil Bank Launches Nepal–India Cross-Border P2P Remittance Service

Nabil Bank has launched a Nepal–India–Nepal cross-border person-to-person (P2P) remittance service. The bank said the service enables customers to send and receive money instantly between Nepal and India through a secure digital platform. Under the facility, Indian citizens holding accounts at Nabil Bank will be able to use mobile banking apps to instantly transfer money to family and friends in India. Similarly, both Nepali and Indian citizens can send money quickly and easily to Nabil Bank users in Nepal, the bank added.

Gold and Silver Prices Decline in Nepali Market on Sunday

The price of gold and silver in the Nepali market declined on Sunday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold has been fixed at Rs 300,800 per tola (11.66 grams) today. Earlier on Friday, gold was traded at Rs 309,000 per tola. In this way, the price of gold has decreased by Rs 8,200 per tola within a two-day period. Similarly, the price of 10 grams of gold has been set at Rs 257,890 today. The Federation has also stated that the price of silver has decreased today along with gold.