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.

Heavy Floods and Landslides Block Five Major Highways Across Nepal:
Due to heavy floods and landslides on Saturday, five major highways across Nepal have been completely blocked, according to Nepal Police. The affected roads include Koshi Highway in Sankhuwasabha, Pasang Lhamu Highway connecting China’s border in Rasuwa, Araniko Highway in Sindhupalchok, and sections of the Bheri Corridor in Rukum West and Dolpa. Additionally, four other road sections in Gandaki and Lumbini provinces are partially open with one-way traffic after clearing landslides. Roads such as Kaligandaki Corridor via Baglung and Gulmi and Rolpa’s Shahid Highway are operating under one-way traffic. Authorities are working to reopen these routes and urge travelers to check road conditions before traveling.

Back-to-Back Glacial Lake Outbursts Alarm Experts; Call for Urgent Climate Action in Nepal:
Nepal has witnessed two devastating flash floods within a year—Khumbu (2024) and Lhende (2025)—both triggered by supraglacial lake outbursts, raising alarms about accelerating glacial risks. ICIMOD confirmed Dijachho Lake and a Tibetan-side supraglacial lake caused the floods, with losses exceeding $30 million. Experts urge urgent climate action, real-time monitoring, and expanded early warning systems. Rising temperatures and increased rainfall in the Himalayas are accelerating glacial melt, making the Hindu Kush region three times more vulnerable to climate impacts. Despite repeated warnings since 1985, Nepal has early warning systems only for Imja and Tsho-Rolpa lakes, leaving many high-risk zones unmonitored.

TAAN Urges Diplomatic Action After Border Bridge Collapse Disrupts Mansarovar Pilgrimage:
The Trekking Agencies’ Association of Nepal (TAAN) has urged the government to initiate immediate diplomatic efforts with China following the collapse of the Nepal-China Miteri Bridge in Rasuwagadhi due to a flash flood in the Lhende stream. The incident has disrupted the Kailash Mansarovar pilgrimage via key checkpoints such as Tatopani, Korola, and Hilsa. TAAN highlighted the severe difficulties faced by pilgrims and called for a streamlined visa process through the Chinese Embassy. President Sagar Pandey emphasized urgency with the pilgrimage season approaching, while TAAN extended condolences to flood victims and urged swift search and rescue operations.

Madhes Province Declares Drought Emergency as Paddy Plantation Falls to 25%:
The Madhes Province government has declared the entire region a drought-affected zone after severe rainfall shortages disrupted paddy transplantation, with only 25% of farmland planted so far. A cabinet meeting cited environmental imbalance and prolonged dryness as causes, prompting a request for immediate aid from the federal government and international donors. Cracks have appeared in planted fields, and seedlings are withering, indicating a looming agrarian crisis. The government also plans to tackle the worsening drinking water shortage in hotspots like Birgunj through emergency tanker distribution and coordination with federal agencies. The traditional planting season is nearing its end without monsoon rains.

PM Oli Inaugurates New 15-Bed Hospital in Ilam’s Mai Municipality:
Prime Minister KP Sharma Oli inaugurated a newly constructed 15-bed hospital in Mai Municipality, Ilam, on Saturday. Built at a cost of Rs. 100.7 million, the two-story facility spans 10.5 ropanis of land. According to Pushkar Kattel, chief of the health division, the hospital will provide 24-hour services, including emergency care, basic laboratory tests, X-ray, video X-ray, ECG, and pharmacy. A health insurance programme has also been implemented to support patient care. The new hospital is expected to significantly enhance access to essential medical services for residents of the area and surrounding communities.

NEPSE Gains 27.84 Points Amid Fiscal-Year End, Flexible Monetary Policy Expectations:
Nepal Stock Exchange (NEPSE) rose by 27.84 points last week, closing at 2,731.80 amid investor anticipation of a flexible monetary policy and fiscal year-end adjustments. The market fluctuated within an 80.50-point range, peaking at 2,743.09. Gains were recorded on Wednesday and Thursday, offsetting earlier declines. Eight of 13 trading groups advanced, led by the banking sector (+3.67%), while life insurance dropped 1.80%. Bhagawati Hydropower gained 18.31%, and Goodwill Finance Debenture lost 18.49%. Nepal Reinsurance topped trading at Rs 2.24 billion. Total turnover rose to Rs 41.58 billion, and market capitalization increased by Rs 46 billion to Rs 4.551 trillion.

Dharahara Generates Over Rs 48.3 Million in Ticket Revenue Since Reopening:
Since its reopening on November 24, 2024, the historic Dharahara tower has generated over Rs 48.36 million in revenue from ticket sales, with 262,555 visitors including 1,549 foreigners. Operating daily except Wednesdays from 10:30 a.m. to 5 p.m., the tower sees around 1,200 daily visitors, according to Mahesh Rai, head of its interim management unit. Entry fees range from Rs 200 for locals to Rs 1,000 for non-SAARC tourists, with discounts for students and seniors. Additional earnings come from parking, photography, and advertising. Officials estimate daily footfall could exceed 1,500 with extended hours. The operation follows a Cabinet-approved fee structure.

NRB’s Monetary Policy Eases Housing and Stock Loan Limits, Cuts Policy Rate to Boost Investment:
Nepal Rastra Bank (NRB) has introduced a monetary policy for fiscal year 2082/83 aimed at revitalizing the housing and stock markets. Governor Dr. Bishwanath Paudel’s first policy raises the residential loan cap from Rs 20 million to Rs 30 million and increases the loan-to-value ratio from 70% to 80%. The stock loan limit has also been expanded from Rs 150 million to Rs 250 million per family. NRB has reduced the policy rate from 5% to 4.5%, aiming to lower interest rates and improve liquidity. The policy also addresses capital shortfalls in banks, permits rights share issuance, and loosens microfinance dividend restrictions.

Horse and Mule Population in Nepal Drops by 40% Over a Decade:
Once the backbone of rural transportation in Nepal, the population of horses and mules has declined sharply over the past decade. According to government data, their numbers have dropped by 40% due to the expansion of motorable roads replacing traditional mule tracks. In 2072 BS, Nepal had 55,800 horses, mules, and donkeys, but this number fell to just 33,900 in the first eight months of the current fiscal year. At its peak in 2073 BS, the population had reached 68,700. Once symbols of status and essential for goods transport, these animals are now disappearing from Nepal’s evolving transport landscape.

Yasoda Foods Opens Second ‘Current Point’ Outlet in Kathmandu Amid Strong Demand:
Yasoda Foods, maker of the popular “Current Noodles,” has launched its second ‘Current Point’ outlet in Anamnagar, Kathmandu, following the success of its first location in Butwal. Inaugurated on Asar 27 (July 12) with brand ambassador and actress Keki Adhikari in attendance, the outlet drew a large and enthusiastic crowd. Chairman Chunna Prasad Paudel said the expansion aims to serve Kathmandu’s spicy noodle lovers, while Global CEO GP Shah shared insights into the brand’s snack and noodle offerings. Established in 2017, Yasoda Foods exports to over 22 countries and is known for delivering bold Nepali flavors with international quality standards.

New Monetary Policy Eases Loan Limits and Interest Rates, Boosting Private Sector Confidence:
Nepal Rastra Bank’s new monetary policy is expected to positively impact private sector lending and housing. Key changes include reducing the policy rate to 4.5% and maintaining the bank rate at 6%, aiming to stabilize interest rates and enhance financial flexibility. The residential home loan cap has been raised to Rs 30 million, making home buying more accessible. The personal share-backed loan limit has increased to Rs 250 million, encouraging greater stock market participation. Additionally, the foreign travel currency limit has been raised to USD 3,000, easing travel for Nepali citizens. These reforms are set to support credit growth and investment.

Nepal’s Shadow Economy Remains Massive, Accounting for 51% of GDP-EY Report:
A new Ernst & Young (EY) report reveals that 51% of Nepal’s GDP stems from unregistered and untaxed activities, placing it third globally for the size of its shadow economy—behind only Sierra Leone and Niger. This vast informal sector, involving cash-only transactions and unregistered businesses, hinders investment, economic growth, and public revenue. Despite a decline from nearly 60% in 2000, progress has slowed recently. Former NRB executive Nara Bahadur Thapa highlights challenges including weak business registration, low tax compliance, limited access to formal credit, and resistance to innovation within informal enterprises. Local research aligns, showing the real estate and agriculture sectors are heavily informal. Nepal’s inclusion on this list, mostly composed of African nations, underscores deep structural and governance issues rather than poverty alone. EY contrasts this with formal economies like the UAE and Singapore, which benefit from strong institutions and digital systems. Experts urge reforms focused on building incentives and strengthening institutions to formalize Nepal’s economy.

Rising Outsourcing and Labour Law Violations Threaten Job Security in Nepal-GEFONT Report:
A recent General Federation of Nepalese Trade Unions (GEFONT) report highlights a sharp increase in outsourced labour in Nepal’s industries, rising to 14.91% in 2024 from 7.3% in 2022. This shift away from regular employment threatens job security, wages, and labour rights, with 77.2% of firms using outsourced workers failing to provide minimum wages and basic benefits. The labour market also saw a decline in regular employment and a rise in part-time and occasional work. Non-compliance with labour laws is widespread: 29% of companies fail to pay legal minimum wages, and many deny festival allowances and salary increments. Labour offices, understaffed and under-resourced, struggle to enforce regulations. Economic slowdown post-pandemic worsens exploitation, as businesses cite financial strain to cut costs. The Social Security Fund suffers from poor registration and contribution rates, leaving many workers unprotected. Advocates call for stronger enforcement, updated labour laws, and expanded institutional capacity to protect workers amid these growing challenges.

Gagan Thapa Returns from Thailand After Advocating Fair Carbon Trade at Asia Climate Summit:
Nepali Congress General Secretary Gagan Thapa has returned from Thailand after participating in the Asia Climate Summit held on July 9. Thapa emphasized equitable distribution of benefits under Article 6 of the Paris Agreement, which governs global carbon trading. Reflecting on Nepal’s past shortcomings in the Clean Development Mechanism (CDM), he stressed the need to avoid repeating such mistakes. Thapa highlighted Nepal’s potential in carbon credit markets through its forests, renewable energy, and sustainable projects. He noted strong interest from countries and companies to work with Nepal and urged swift action, calling the issue highly time-sensitive and crucial for development finance.

Homestays in Baglung See Decline in Tourists Due to Rain and Poor Roads:
Homestays in Baglung’s Bhakunde and Kathekhola villages have become quiet as heavy rains and damaged roads deter tourists. Bhakunde, known for its Himalayan views, typically attracts many visitors, but frequent road disruptions have led to a significant drop in guests. The 15 homestay operators expect tourist activity to pick up only from mid-September onward. Poor road conditions make transportation and travel difficult for locals and visitors alike. Kathekhola’s community homestays face similar challenges, with business largely halted during the four-month rainy season. Local officials have pledged to improve roads year-round and promote rural tourism to revive the sector.

73.5 MW Madhyamewa Hydropower Project in Taplejung 80% Complete:
The 73.5 MW Madhyamewa Hydropower Project in Mikwakhola Rural Municipality, Taplejung, has achieved 80% physical progress since construction began in 2021. The underground powerhouse—measuring 61.5 meters long, 15 meters wide, and 27 meters high—has been completed. After a 13-month COVID-19-induced halt in 2022, construction work has accelerated. The project features a 5,200-meter tunnel from Sawa to Libang and a 10.7-km 220 kV transmission line with 35 towers nearly finished. The project, expected to generate 436.08 GWh annually with a partial reservoir, is valued at around NPR 18 billion and scheduled for completion by March 2026.