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:

Foreign Exchange Reserves Reach Rs 3.41 Trillion

Nepal’s foreign exchange position has remained comparatively strong, with reserves reaching Rs 3.41 trillion, enough to support imports for 18.5 months. However, credit expansion remains sluggish. While bank deposits increased by 15.1 percent, lending grew by only 6.7 percent. Despite ample liquidity in the banking system, investment conversion has remained weak. The tourism sector has shown improvement, with 1.162 million tourists visiting Nepal in 2025. Average tourist stay has increased to 16.34 days, though daily spending has dropped from USD 40.8 to USD 33.08, indicating declining returns despite higher visitor numbers.

Federal Budget Spending Remains Low Compared to GDP

Over the past decade, Nepal’s allocated federal budget has averaged 33.7 percent of GDP annually, while actual expenditure has averaged only 26.8 percent. The budget-to-GDP ratio peaked at 39.4 percent in fiscal year 2019/20 but declined to 30.5 percent in fiscal year 2024/25. According to the Ministry of Finance, the annual average budget growth rate during this period stood at 12.3 percent, while the average growth rate during the five fiscal years after the Covid pandemic was only 4.1 percent.

Nepal’s Per Capita Disposable Income Rises to USD 2,044

Nepal’s per capita gross national disposable income is estimated to rise to USD 2,044 in the current fiscal year, up from USD 1,914 last year. Despite weak economic activity and low economic growth, analysts say increased remittance inflows and service exports have contributed to positive trends in several economic indicators. Per capita GDP at current prices is also projected to increase by 5.5 percent to Rs 217,946 this fiscal year.

Public Enterprises’ Assets Rise to Rs 3.2 Trillion

The total assets of Nepal’s public enterprises increased by 9.5 percent this year to Rs 3.20 trillion, while their total operating income rose by 0.7 percent to Rs 672.40 billion. However, the contribution of public enterprises to the federal government’s total income tax revenue declined from 5.17 percent to 3.82 percent. Out of 38,285 approved positions in public enterprises, only 30,352 employees are currently working. Unfunded liabilities, including pension obligations for retired employees, rose by 10.10 percent to Rs 66.40 billion.

Government Inquiry Report Exposes Deepening Crisis in Nepal’s Cooperative Sector

The recently released report by the “Inquiry Commission on Malpractices in Cooperatives, 2026” reveals that public trust in the cooperative sector has severely eroded due to widespread financial irregularities, embezzlement of depositors’ funds, and weak regulatory oversight. Despite being a vital pillar of Nepal’s three-pillar economy, cooperatives have plunged into crisis because registration and expansions were approved without proper criteria, coupled with direct political interference and a lack of coordination among regulatory bodies.

IPPAN Urges Government to Resume Stalled Hydropower Projects

The Independent Power Producers’ Association Nepal (IPPAN) has urged Minister for Agriculture, Forests and Environment Gita Chaudhary to facilitate the resumption of construction work on five hydropower projects halted under directives from Langtang National Park. An IPPAN delegation led by President Ganesh Karki met the minister on Wednesday, requesting an environment conducive to restarting nationally prioritized hydropower projects. Submitting a memorandum, Karki said many hydropower projects had potential within national park areas, but delays and restrictions imposed even after approval of Environmental Impact Assessment reports had discouraged private investors.

Foreign Airlines Continue Dominating Nepal’s International Aviation Sector

Only three Nepali airlines currently operate international flights from Nepal: the national flag carrier Nepal Airlines Corporation, private carrier Himalaya Airlines, and Buddha Air. Buddha Air has yet to acquire larger aircraft and currently operates flights from Kathmandu to Varanasi and Kolkata using ATR 72 aircraft. Nepali airlines’ limited competitiveness in international aviation has allowed foreign carriers to dominate Nepal’s aviation market. Foreign airlines also benefit from VAT exemptions, spare-parts concessions, and lower fuel costs in their home countries.

Tourist Spending Continues to Decline Despite Longer Stays

Although tourists are staying longer in Nepal, their average daily spending continues to decline. The average daily spending per tourist fell from USD 40.84 in 2024 to USD 33.08 in 2025 — a decline of nearly USD 7.76, or around 19 percent, within a year. Data since 2020 show a steady downward trend in tourist spending. Average daily expenditure stood at USD 65 in 2020, USD 48 in 2021, USD 40.5 in 2022, USD 41 in 2023, USD 40.84 in 2024, and USD 33.08 in 2025.

Public Enterprises Still Weak in Financial Discipline

Nepal’s public enterprises continue to show weak financial discipline despite some improvement in auditing practices. According to a recent report, 27 public enterprises had completed final audits up to fiscal year 2024/25, while 34 enterprises had completed audits up to fiscal year 2023/24. The report noted that although the number of audited enterprises has increased, compliance with financial discipline remains weak. Meanwhile, unfunded liabilities increased by 10.10 percent compared to the previous review period, reaching Rs 66.40 billion.

CIB Seeks Freeze on Shares of 56 High-Profile Individuals

The Central Investigation Bureau (CIB) of the Nepal Police has asked the Securities Board of Nepal to freeze the shares and provide details of investments linked to 56 high-profile individuals. The bureau said the move is part of an investigation into offenses under the Securities Act, 2007. In a letter sent on May 25, the bureau said the investigation relates to a case filed by the Securities Board of Nepal itself, in which the Government of Nepal is the plaintiff.

China Maintains Dominance in Foreign Direct Investment in Nepal

China has maintained its dominance in foreign direct investment (FDI) in Nepal, accounting for 48 percent of total investment approvals as of mid-March 2026. In terms of project numbers, China also leads with 45.5 percent. Out of 7,951 approved foreign investment projects, 3,617 Chinese-backed projects worth Rs 300.39 billion have received approval. India ranks second, with investment commitments worth Rs 112.20 billion across 945 projects, accounting for 17.9 percent of total approved FDI.

Public Enterprises Owe Government Nearly Rs 165 Billion

Public enterprises still owe nearly Rs 165 billion to the Government of Nepal, according to a recent report. In fiscal year 2024/25, the government was expected to receive Rs 164.96 billion from public enterprises under various headings. Of that amount, Rs 11.36 billion was expected from income tax, Rs 52.33 billion from VAT, while the remainder included interest, royalties, customs duties, and other payments. Public enterprises currently have 38,285 approved positions, with 30,352 employees in service. Sector-wise, the highest number of employees are engaged in utility-related enterprises, while the fewest work in the social sector.

More Than 71 Percent of Local Roads Still Unpaved

Of the 68,100 kilometers of provincial and local roads built across Nepal, 71.46 percent remain unpaved. According to the current fiscal year’s Economic Survey released by the Ministry of Finance on Wednesday, 48,665 kilometers of provincial and local roads remained unpaved as of mid-March. The data show there are 33,847 kilometers of provincial roads and 34,253 kilometers of local roads, but only 5,096 kilometers are blacktopped.

Government Targets Completion of Six National Pride Irrigation Projects Within Three Years

The government has proposed a budget plan aimed at completing six under-construction national pride irrigation projects within the next three years. Nepal currently has 27 national pride projects. The six irrigation projects include Sikta, Babai, Rani Jamara Kulariya, Sunkoshi Marin Diversion, Mahakali Irrigation, and the Bheri Babai Diversion Multipurpose Project. The projects currently have an average physical progress of around 56 percent. According to the Department of Irrigation, Babai Irrigation has achieved 77.34 percent physical progress, Mahakali Irrigation 26.6 percent, Sikta Irrigation 44.75 percent, Rani Jamara Kulariya 74.76 percent, Bheri Babai 69 percent, and Sunkoshi Marin Diversion 36.83 percent.

CAAN Inaugurates New Parallel Taxiway System at Tribhuvan International Airport

The Civil Aviation Authority of Nepal (CAAN) has officially inaugurated a newly constructed Parallel Taxiway “P” along with its associated taxiways “S” and “T” at Tribhuvan International Airport in Kathmandu, according to an official press release dated 28 May 2026. The joint inauguration ceremony was held this morning by Mr. Mukunda Niraula, Secretary of the Ministry of Culture, Tourism and Civil Aviation, alongside Mr. Mukesh Dangol, the Director General of CAAN. The event was well-attended by representatives from the Ministry, CAAN, airport offices, various airlines, and key project stakeholders.

Israel Seeks 2,300 Nepali Caregiver Assistant Workers

Israel has sought applications from 2,300 Nepali workers for employment as assistant workers in long-term care centers. The demand has been announced under the labor agreement between the governments of Nepal and Israel. According to the department, in the third phase of recruitment, 60 percent of the selected workers will be women and 40 percent men.

Muglin–Pokhara Road Project Faces Further Delays

Construction work on the western section of the Muglin–Pokhara road expansion project along the Prithvi Highway has slowed significantly. The road expansion and upgrading project, launched five years ago, remains incomplete despite repeated deadline extensions. The western section covers a 38.71-kilometer stretch from Jamune in Tanahun to Setipul in Pokhara. The project deadline was extended for a third time in January until June 29. However, recent progress suggests that completion within the revised timeframe remains uncertain.

Discussions Held to Ease Import of Indian Coal Into Nepal

Discussions have intensified between an Indian coal company and the Birgunj Chamber of Commerce and Industry on facilitating coal imports into Nepal. The talks focused on facilities offered by India’s state-owned coal company and problems faced by Nepali importers. Previously, coal used by Nepal’s cement, iron, and brick industries was imported from countries including the United States, Africa, Australia, Bhutan, and India. Currently, imports are mainly sourced through India’s government-owned coal company, though Nepali businesses are not allowed to import directly.

Karnali Government Violates Its Own Policy on Budget Transfers

The Karnali Province government has repeatedly pledged to discourage the practice of transferring budget allocations at the last minute in the end of the fiscal year. However, records show that the government itself has failed to follow the policy in practice. Section 20 of the Karnali Province Financial Procedures and Fiscal Responsibility Act, 2024 allows ministries to reallocate funds within a limit of 10 percent under the Appropriation Act. Last year alone, the provincial government transferred Rs 1.53 billion in budget allocations, including nearly Rs 100 million during the last month of fiscal year.

Department Orders Recall of ‘Tez’ Mustard Oil Over Quality Concerns

The Department of Food Technology and Quality Control has ordered the immediate recall of ‘Tez’ brand mustard oil produced by Siddhartha Oil Industries in Rupandehi after the product was found to be substandard. The department said laboratory testing of samples collected during market monitoring showed that the oil failed to meet mandatory government quality standards. According to the department, defects were found in the oil produced from imported mustard seeds by Siddhartha Oil Industries.

Gold Price Drops by Rs 5,500 per Tola

Gold prices fell sharply by Rs 5,500 per tola (11.66 grams) on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of fine gold has been fixed at Rs 285,000 per tola. On Wednesday, gold was traded at Rs 290,500 per tola. Similarly, silver prices also declined by Rs 215 per tola, settling at Rs 4,865 per tola.