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Nepal News Evening Economic Brief – May 13, 2025

May 13, 2025
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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 Declines by Double Digits on Tuesday: The stock market witnessed a double-digit decline on Tuesday, with the market index (NEPSE) dropping by 14.12 points, settling at 2,634.86. The total transaction volume for the day amounted to NPR 9.63 billion. A total of 77 companies saw an increase in their share prices, while 168 companies experienced a decline. One company maintained its share price without any change. In today’s trading, shares of Crete Micro Life and Om Megashree Pharmaceuticals hit the positive circuit limit, marking significant growth. Conversely, shares of Gurans Laghubitta Financial Institution saw the largest drop among listed companies. Sector-wise analysis revealed that life insurance, development banks, and manufacturing and processing companies showed growth in their indices.

Prime Minister KP Sharma Oli Claims State Treasury is Empty: Prime Minister KP Sharma Oli stated that the country’s treasury is empty. While addressing the inauguration ceremony of the Cinepa Film Shooting Studio at Baluwatar on Tuesday, Oli mentioned that during his previous tenure as Prime Minister, the state treasury had ample funds. However, he expressed concerns that the current financial situation is so dire that even announcing new projects seems daunting. He further elaborated that during his last tenure, there were enough funds to undertake any project, and he inaugurated health centers in all municipalities. Oli remarked, “People get very excited even for small projects. They say, ‘We are here,’ and collect donations.”

Ministry of Finance Holds Discussions with Development Partners on Upcoming Budget: The Ministry of Finance has held discussions with development partners regarding the upcoming fiscal year’s budget. On Tuesday, the Ministry invited bilateral and multilateral agencies that provide economic assistance to Nepal for discussions. During the discussion, Finance Minister Bishnu Poudel noted that Nepal’s economic indicators are gradually improving. “We have been initiating economic reforms for some time and are seeing positive results. Moving forward, we will prioritize economic reforms,” said Finance Minister Poudel. “The amendments made through ordinances, recommendations from the High-Level Economic Reform Commission, and various policies and decisions are critical aspects of policy reform,” he added.

NEA Extends Administrative Review Deadline for Dedicated Feeder and Trunk Line Customers: The Nepal Electricity Authority (NEA) has announced that the deadline for administrative review for customers (industries) using dedicated feeders and trunk lines has been extended until the end of May. NEA published a public notice stating that customers with outstanding electricity bills can apply for administrative review until the specified date. Customers are required to deposit 5% of the bill amount either in cash or as a bank guarantee valid for one year under the NEA Electricity Distribution Regulation 2078, Clause 55 (2).

Loan Interest Rates Drop to Historic Low: The interest rates on loans have fallen to a historic low since Nepal Rastra Bank began calculating the weighted average interest rates. Nepal Rastra Bank started calculating the weighted average interest rates in Ashoj 2069 B.S. At that time, the weighted average interest rate on loans was 12.94%, while the weighted average interest rate on deposits was 4.14%. Similarly, it began keeping weighted average base rate statistics from Poush 2069 B.S. In Poush 2079 B.S., the weighted average base rate of commercial banks stood at 9.38%, while the weighted average interest rate on loans was 12.56% and on deposits was 5.13%.

Private Sector Calls for Adjustment in Income Tax Limits: The private sector has demanded a reduction in the maximum limit of personal income tax and an increase in the minimum limit for the upcoming fiscal year. Both the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Confederation of Nepalese Industries (CNI) have made similar demands in their separate budget recommendations. The FNCCI suggested that the maximum personal income tax rate, including surcharges, should not exceed 30%. Additionally, it proposed that the tax exemption limit should be raised to 800,000 rupees for individuals and 1 million rupees for couples.

IPO Fast Track Process to be Implemented Amidst Two-Year Freeze: Following a two-year halt in IPO issuance, the Securities Board of Nepal (SEBON) is preparing to hold sales managers accountable by implementing a ‘fast track’ process. Amid accusations of demanding commissions to expedite IPO approvals, SEBON announced plans to speed up the approval process and has asked sales managers for the progress reports of every project in the pipeline. A SEBON source stated, “We are conducting on-site inspections of all files and projects, which is why the IPO approval process has been delayed. There are many companies in the pipeline.”

Upper Tamakoshi Hydropower’s Accumulated Losses Reach 12.18 billion Rupees: Upper Tamakoshi Hydropower has reported an accumulated loss of 12.18 billion rupees for the current fiscal year’s third quarter. The financial report, made public by the company, reveals that by the end of Chaitra, the accumulated loss had reached 12.18 billion rupees. During the same period last fiscal year, the loss stood at 8.69 billion rupees. According to the financial statement, the company’s share premium remains at 913.7 million rupees, unchanged from the previous fiscal year. Last year, the company had reported a loss of 1.39 billion rupees by the end of Chaitra, which has now escalated to 2.06 billion rupees by the same time this fiscal year.

Former Finance Minister Gyanendra Bahadur Karki Advocates for Diversification of Himalayan Tourism: Nepali Congress MP and former Finance Minister Gyanendra Bahadur Karki has emphasized the need for Nepal to diversify its tourism sector beyond Himalayan tourism. Speaking during a discussion on the principles and priorities of the budget, Karki stated that while Nepal has long focused on Himalayan tourism, melting glaciers indicate the need for alternatives such as religious and cultural tourism. “We have solely focused on Himalayan tourism. The glittering mountains are starting to turn black like iron. Now, we must introduce provisions to attract cultural and religious tourists. Promoting sites like the Ram Janaki Temple could bring tourists from India,” he remarked.

Supreme Court Issues Show Cause Order Against Former Governor Mahaprasad Adhikari: The Supreme Court has issued a show cause order regarding a writ petition that claims Mahaprasad Adhikari, the outgoing governor, is ineligible to be a member of the Governor Recommendation Committee. On Tuesday, a single bench of Judge Binod Sharma issued the show cause order. The court has summoned both parties for a discussion on May 17. Advocate Nabin Dhital had filed the writ petition on May 11, stating that Adhikari’s involvement in the three-member recommendation committee formed by the government is unlawful and renders the committee’s recommendations invalid.

Writ Filed Against Bishwo Poudel’s Potential Nomination as Governor: A writ petition has been filed at the Supreme Court against the potential appointment of economist Dr. Bishwo Poudel as the governor of Nepal Rastra Bank. Advocates Prativa Upreti and Bishal Thapa filed the writ, claiming that appointing a political party member as the central bank governor contradicts the Nepal Rastra Bank Act. Although the writ has been filed, it is yet to be registered. Previously, the same advocates had filed writs against Dr. Gunakar Bhatta’s appointment as governor and the amendment to age limitations for public appointments under the Ministry of Finance.

CIAA Files Corruption Case Against Former Bara Postal Chief and Six Others: The Commission for the Investigation of Abuse of Authority (CIAA) has filed a corruption case against former Bara Postal Office Chief Jay Lal Prasad Sah and six others in the Special Court, accusing them of causing damage to public property and embezzling funds. The CIAA’s investigation revealed that since 2060 B.S., the accused had been handling the Postal Savings Bank without proper record-keeping and had misused the savings of depositors. They allegedly collected public deposits, recorded transactions only in passbooks and ledgers, but did not reflect these transactions in the cash registers of the office. Instead, they distributed the funds among themselves without depositing them in the bank, according to the CIAA.

Government Receives 50-Point Recommendation for Strengthening Federalism: Stakeholders involved in the study and research of federalism have provided a 50-point recommendation to the government for the strengthening, institutional development, and effective coordination between the three tiers of government. While the federal government is in the process of budget formulation, stakeholders have specifically recommended that all types of grants flowing to the provincial and local levels should be brought under the jurisdiction of the National Natural Resources and Fiscal Commission. The written recommendation was submitted to Finance Minister Bishnu Prasad Paudel at Singha Durbar on Monday, under the leadership of the Federalism and Localization Center (FLC), which has been conducting studies on the implementation of federalism.

Construction of 45 MW Hydropower Project Begins in Sindhupalchok: Brahmayani Hydropower Company has initiated the construction of a 45 MW hydropower project in Jugal Rural Municipality-2 in Sindhupalchok. The construction began with an explosion at the tunnel entrance, following traditional Lama and Brahmin rituals. Chief District Officer Kiran Thapa triggered the blast at the tunnel entrance to officially commence the project. The project will divert water from the Bramhayani River through a 5.5 km tunnel from Ward No. 2, Chhindang, to the powerhouse in Dipu, Tembathan, according to company chairman Bharat Parajuli. Access roads and engineering camps have been completed, and necessary structures for hydropower development are currently under construction.

Privatization of Eight Hydropower Proposed: The Department of Electricity Development (DOED) has proposed the privatization of eight hydropower projects under the “Build, Operate, Own, and Transfer” (BOOT) model. These projects, with a total capacity of 365.42 MW, have been opened for expression of interest (EOI) from private sectors until Jestha 25. The projects slated for privatization include Beni Kaligandaki with a capacity of 50.5 MW located in Myagdi and Parbat, Dudhkoshi-4 with 47 MW in Solukhumbu, and Humla Karnali with 61.02 MW in Humla. Additionally, Inkhu Khola, with a capacity of 21.4 MW, is also located in Solukhumbu, while Kaligandaki Upper, generating 65 MW, is situated in Myagdi. Further, Loti Karnali PROR with 49.5 MW is based in Humla, and Lower Hongu with 30.2 MW is also in Solukhumbu. Lastly, Sankhuwakhola-1, with a capacity of 40.8 MW, spans across Sankhuwasabha and Bhojpur.

STC Energy Industries Begins Production of Vehicle Batteries in Nepal: STC Energy Industries Pvt. Ltd., operating from Hetauda, Makwanpur, has started manufacturing vehicle batteries under a Nepali brand. The company has established its plant in the Hetauda Industrial Area and is producing batteries for vehicles that are being supplied not only to the domestic market but also exported to India. The company stated that its objective is to fulfill the high demand for vehicle batteries in Nepal’s auto market by producing them domestically. In Nepal, not only vehicles but also auto components used in them are mostly imported from foreign markets.

Gaja Lake in Baglung Emerging as a New Tourist Attraction: Gaja Lake, situated at an altitude of 2,500 meters above sea level in Baglung, is becoming a notable tourist attraction. The religiously significant site is located in Jaimini Municipality-3 and borders Galgkot Municipality, Kathekhola Rural Municipality, and Barekot Rural Municipality. Jaimini Rural Municipality and the local community have been taking the initiative to protect the lake, build infrastructure, and construct the Siddha Baraha Temple in the area. The temple is currently under construction, and last year, a swing with a photography spot overlooking the lake was also set up.

The Beni-Pakhapani road section connecting Neptachaur to Patlekhet in Myagdi has been upgraded after 15 years of basic maintenance. Initially opened in 2010, this alternative route to Beni-Pakhapani was previously only maintained for simple transportation. Under the Beni Municipality’s current fiscal year road development project, the Beni-Arthunge-Toripani-Pakhapani road was upgraded with widened lanes, gabion walls, drainage, and proper paving.

Hyundai Launches Creta EV in Chitwan: Laxmi Intercontinental Pvt. Ltd., the official distributor of Hyundai vehicles in Nepal, has launched the new Creta EV in Chitwan. The Creta EV was unveiled during a special event in Bharatpur, where five electric vehicles were handed over to customers. The company aims to promote electric mobility across Nepal by sending its management team to various cities for direct engagement with dealers.

Open Border Fuels Illegal Trade of Indian Gutkha in Nepal: Commerce, Supplies, and Consumer Protection Department Director General Kumar Dahal stated that the open border between Nepal and India has facilitated the illegal trade of Indian Gutkha. Rajnigandha, a popular brand, is smuggled into the Kathmandu Valley, evading taxes. Dahal claimed that Rajnigandha, which has an annual market of around 10 billion rupees, only sees legal imports worth about 3 billion rupees. The remaining 7 billion rupees worth of Gutkha is supplied through illegal means, dominating the market.

Gold Prices Drop in the Domestic Market; Silver Prices Increase: Compared to Monday, the price of gold has dropped in the international market today. This decline is reflected in the local market as well, with the price of gold falling by NPR 2,000 per tola. However, the price of silver has increased by NPR 10 per tola. According to the Federation of Nepal Gold and Silver Dealers Association, the price of gold per tola is now NPR 184,800, while silver is being traded at NPR 1,970 per tola. Last Friday, the price of gold was NPR 186,800 per tola, and silver was traded at NPR 1,960 per tola.