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:

Govt Lifts Budget Reallocation Limits for Reconstruction, Relief, and Elections After Gen Z Protests:
The interim government has removed limits on budget reallocation to cover reconstruction of public infrastructure damaged during the Gen Z protests on Bhadra 23–24, as well as for relief, economic recovery, public service continuity, and the upcoming elections. Previously, the Appropriation Act allowed reallocation up to four times the original allocation within approved programs, but the government issued a Gazette notification removing these restrictions for emergencies and special circumstances. The order permits reallocating funds beyond normal limits within the fiscal year to address reconstruction, relief, disaster response, and critical projects, ensuring rapid restoration of services and economic stabilization.

Government Moves to Terminate 17 Long-Stalled Road and Bridge Contracts, Including 14-Year Kankai Bridge Project:
The government has begun terminating 17 long-delayed road and bridge construction contracts that have remained incomplete for years. The Postal Road Directorate, Federal Road Supervision and Monitoring Office, and Road Division Offices in Biratnagar, Chandranigahapur, and Itahari have issued public notices seeking justification from contractors. The largest project facing termination is the 723-meter Kankai Bridge in Jhapa, contracted to Pappu Construction and Mahadev Khimti JV in 2011 for Rs. 510 million, with only 55% progress in 14 years. Minister Kul Man Ghising directed action to end the trend of idle contractors. Non-performing firms face blacklisting and recovery of government dues.

26 Industries Seek Proof Before Paying NEA Trunk and Dedicated Line Dues:
Twenty-six Nepali industries, embroiled in a dispute over trunk and dedicated line electricity charges, have written to Prime Minister Sushila Karki seeking proof of actual consumption. They pledged to pay dues—whether NPR 4 billion or 40 billion—if consumption is verified. The Nepal Electricity Authority (NEA) billed industries without sharing Time-of-Day (TOD) meter data, prompting the letter. Industries argue that NEA misapplied tariffs and seek legal protection rather than exemption. NEA has warned it will cut power by November 3 if arrears remain unpaid. The disputed dues cover consumption from Magh 2072 to Baisakh 2075, with monthly installment options up to 28 months offered.

Gen Z Protests, Floods Push Nepalese Banks into Recovery Crisis:
Nepalese banks face unprecedented stress as borrowers, affected by the September Gen Z protests and October floods, struggle to pay even regular interest. Bankers report that businesses cite disrupted operations, property damage, and bureaucratic obstacles as reasons for default. Data from Nepal Rastra Bank shows direct losses of NPR 37 billion on NPR 104 billion approved loans, with many projects stalled. Banks are lobbying for an extra month to collect interest and avoid additional non-performing loan provisions. CEOs warn that the recovery outlook for the first quarter is the worst in recent memory, with both loan recovery and new investment activity severely hampered.

Gen Z Protests Cause Rs 3.7 Billion Loss; Government and Banks Launch Relief Package:
The Gen Z protests on Bhadra 23–24 caused extensive damage to private businesses and residences, resulting in losses of Rs 3.7 billion. Out of Rs 15.4 billion in bank credit utilized by 612 affected businesses, Rs 3.7 billion was damaged, partially covered by insurance. Prominent properties, including Hilton Hotel, CG Digital Park, and several cable cars, were targeted, along with 68 bank branches, 100 ATMs, and 73 extension counters. In response, the government and Nepal Rastra Bank launched a relief package including 50% customs exemptions on reconstruction imports, advance insurance claims, loan restructuring until Poush 2082, and payroll protection schemes to restore business and safeguard employment.

Nepal’s Tourism Struggles to Recover After Gen Z Protests, Signs of Revival Emerge:
Nepal’s tourism industry, vital to its economy, was severely disrupted by the Gen Z protests in September, which coincided with the peak autumn season. Iconic destinations like Thamel and Chitwan saw hotel occupancy drop to 30–50 percent, while high-spending foreign tourists canceled trips amid travel advisories. Domestic and international bookings fell sharply, yet signs of recovery are emerging as tourists return and adventure operators report steady bookings. The Nepal Tourism Board and Prime Minister Sushila Karki have launched campaigns to rebuild confidence, emphasizing safety for visitors. Despite challenges, the sector remains optimistic, hoping stability will restore Nepal’s tourism momentum.

Nepal’s Inflation Falls to 21-Year Low as Weak Demand, Political Turmoil, and Migration Slow Economy:
Nepal’s inflation dropped to a 21-year low of 1.87 percent in mid-September, reflecting weak domestic demand amid political instability, corruption, and rising youth migration. The last time inflation was this low was in 2003–04. Central bank officials attributed the decline to sluggish consumption and disruptions from floods and the Gen Z protests, which halted business activity. Despite record-high foreign exchange reserves of $20.41 billion, much of the money remains idle in banks. Food prices fell 1.34 percent, while non-food inflation stood at 3.70 percent. Economists warn the low figure masks deeper structural problems, including declining incomes, unemployment, and rural distress.

Floods and Landslides Devastate Tourism and Agriculture in Ilam, Panchthar, and Taplejung:
The far-eastern districts of Ilam, Panchthar, and Taplejung have suffered a severe blow to tourism and agriculture following floods and landslides on October 5, compounding losses from the recent Gen Z movement. The Mechi Highway, a key route for domestic and foreign tourists, has been blocked, leaving hotels, homestays, and trekking routes deserted. Popular sites such as Mai Pokhari, Timbung Pokhari, Sandakpur, and Pathibhara Temple have seen visitor numbers plummet. Transport disruptions have also halted the export of Taplejung’s cardamom harvest. Local entrepreneurs warn that without immediate government intervention and infrastructure repair, the regional economy may take years to recover.

Nepal’s Economic Indicators Strong on Paper, Real Activity Lags Amidst Gen-Z Fallout:
Despite strong macroeconomic indicators—rising remittances, improving exports, and bolstered foreign reserves—Nepal’s real economic activity remains sluggish. As of mid-Bhadra, inflation stands at 1.87%, private sector credit growth is only 0.9%, and industrial investment and consumer spending remain muted. Remittances reached Rs. 3,52,08 crore in two months, up 33% YoY, while foreign reserves rose 7.6% to Rs. 28,81,35 crore. Exports surged 88.6%, but imports also climbed 16.2%, leaving trade gaps. Digital payments show strong growth. However, post-JENZI unrest caused Rs. 2,40,00 crore in damages, hitting investor confidence and GDP. Experts stress policy stability, private sector activation, and investment-friendly reforms to translate macro gains into real economic growth.

Banks See Safe Haven in Gold-Backed Loans:
Gold prices in Nepal reached a historic high of Rs. 250,900 per tola on Thursday, up Rs. 2,000 from Wednesday. Ten grams of gold now cost Rs. 215,105. Rising global uncertainties, a weaker U.S. dollar, and regional tensions are driving investors toward gold as a safe-haven asset. Banks have increasingly turned to gold-backed loans, offering short-term, low-risk, high-liquidity financing for individuals and small businesses, with interest rates ranging from 9–12%. In the first two months of FY 2082/83, banks disbursed Rs. 284 crore in gold-collateral loans, 38% higher than last year, highlighting gold’s role as a stable, secure investment amid economic volatility.

Govt Mandates Licensed Brokers for Real Estate Deals Above Rs. 3 Crore in Major Cities:
The government has announced that all real estate transactions worth over Rs. 3 crore in major metropolitan and sub-metropolitan cities must now be conducted through licensed brokers. Individuals can still trade property directly, but companies, developers, or corporate-to-corporate transactions exceeding Rs. 3 crore must use brokers licensed by the Ministry of Land Management. The Gazette notification provides a clear framework for licensing and registration, marking partial implementation of the broker system long advocated by real estate developers. Officials say the move will institutionalize the property market, ensure scientific pricing, proper accounting, and protect government revenue, while reducing unregulated direct dealings in high-value properties.

Banks Cut Interest Rates on Personal Fixed Deposits for Kartik; Average Falls to 5.20%:
Nepalese commercial banks have lowered interest rates on personal fixed deposits for Kartik, following the trend from Aswin. According to the Nepal Bankers’ Association, 14 out of 20 banks reduced rates, while 6 kept them unchanged. The average rate on personal deposits dropped from 5.46% in Aswin to 5.20% in Kartik. Major changes include NIC Asia Bank reducing personal deposits to 5.75% (from 6%) and Prabhu Bank to 4.95% (from 5.35%). Institutional deposit rates also saw marginal reductions. Banks cite monetary policy adjustments and liquidity conditions for the cuts. Rates now vary across banks from 4.95% to 6% for personal deposits.

RBI Directs Banks on Interim Financial Statement Publication:
Nepal Rastra Bank (NRB) has issued strict directives to banks regarding the publication of financial statements. A circular released today to Bank A, B, C, D, and Infrastructure Development Bank specifies that for FY 2082/83 first quarter, interest income accounted on a pro-rata basis—excluding interest received by Kartik 15, 2082—must be allocated for income tax, employee bonuses, and statutory funds (general reserve and CSR reserve). The remaining amount should be transferred to the regulatory reserve from retained earnings. The circular also extends the deadline for submitting monthly and quarterly reports to NRB and publishing interim financial statements to Kartik 21, 2082.

NRB Tightens Rules on Suspicious Transactions, Updates STR/SAR Guidelines:
Nepal Rastra Bank (NRB) has strengthened regulations on suspicious transactions by updating its STR/SAR (Suspicious Transaction/Activity Report) guidelines. The revisions, aligned with the Money Laundering Prevention Act, 2064, provide practical guidance for reporting entities to identify and report suspicious activities. Red flags are now categorized into three types—general, specific to reporting entity type, and related to associated offenses. New areas flagged include AI and emerging technologies, hire-purchase companies, and automobile sales firms. The guidelines also detail reporting procedures, timelines, and required information, aiming to enhance the quality of STR/SAR submissions and support investigations against money laundering and related crimes.

Finance Minister Khanal Meets Singapore President, IFC Officials on Nepal’s Economic Priorities:
Finance Minister Rameshore Prasad Khanal met with Singapore’s President Tharman Shanmugaratnam on the sidelines of the World Bank Group’s annual meeting on Friday. According to the Embassy of Nepal in Washington D.C., their discussions focused on Nepal’s political developments and economic priorities. President Shanmugaratnam highlighted five key areas for Nepal’s rapid economic growth—human capital, infrastructure, energy, trade, and liberalism. Minister Khanal also met Allen Forlemu, Acting Regional Vice President of the International Finance Corporation (IFC), to discuss expanding IFC’s partnership and support for Nepal’s private sector. The meeting was attended by Finance Ministry, NRB, and IFC officials.

Manang Farmers Turn to Hybrid Apples for Higher Yields and Faster Income:
Farmers in Manang are increasingly adopting hybrid apple cultivation due to higher yields and quicker returns compared to native varieties. Hybrid apple trees begin producing fruit within a year, unlike traditional saplings that take 4–5 years to mature. According to farmer Sol Bahadur Gurung of Tachai, hybrid apples offer better income but face transport challenges due to poor roads. Agricultural experts report that most farmers have shifted from native to hybrid varieties. Despite growing production, many apples rot on farms as road networks remain inadequate. Farmers believe that reducing foreign apple imports could make Nepal self-sufficient and lower market prices.

Pokhara to Begin Modern Slaughterhouse Construction After Tihar Amid Rising Demand for Hygienic Meat:
Kaski, one of Nepal’s highest meat-consuming districts, still lacks a proper slaughterhouse despite daily sales of thousands of kilograms of meat. In Pokhara, around 500 meat shops operate without modern hygiene facilities, forcing consumers to buy meat cut in open, unsanitary conditions. Entrepreneurs and civil society groups have long urged the city to enforce the 1998 Meat Inspection and Slaughterhouse Act. Pokhara Mayor Dhana Raj Acharya announced that construction of a modern slaughterhouse will begin after Tihar under a public-private partnership (PPP) model. He said the facility will meet hygiene and technical standards, ending years of inaction and land disputes.

KMC Intensifies Market Monitoring During Festivals, Warns Action Against Unhygienic Eateries:
The Kathmandu Metropolitan City (KMC) has intensified market monitoring during the festival season in coordination with the Department of Food Technology and Quality Control. Inspections of small hotels and restaurants in New Baneshwor revealed that many were operating below required standards, according to KMC. Nur Nidhi Neupane, Chief of KMC’s Agriculture and Livestock Department, said illegal and unhygienic businesses have been directed to comply with regulations or face legal action. Emphasizing the risk of disease spread due to negligence, KMC Food Hygiene and Quality Advisor Santosh Giri stated that the city is prioritizing empowerment, regular monitoring, and strict enforcement of hygiene standards.

Over 19,000 Students’ Answer Sheets Lost in Gen Z Arson; CTEVT and TU to Hold Reexaminations from November:
The answer sheets of at least 19,000 students from the Council for Technical Education and Vocational Training (CTEVT) and Tribhuvan University (TU) were destroyed in arson during the Gen Z movement on September 8–9. Protesters set fire to police stations where the answer sheets were stored. CTEVT reported that 60,000 answer sheets of 16,883 students were lost, while TU lost over 1,500 sheets of 652 students. Reexaminations will begin on November 16 and 20, respectively. Some students have demanded internal reviews instead of retests, citing stress and hardship, but CTEVT insists exams are essential for academic integrity despite the Rs 4 million cost.

NEA Assures Uninterrupted Power Supply During Tihar Despite Flood Damage to Private Plants:
The Nepal Electricity Authority (NEA) has assured that there will be no power cuts during Tihar, the festival of lights. Electricity demand is expected to peak at around 1,600 MW on Laxmi Puja, similar to last year. NEA Spokesperson Rajan Dhakal said the authority is fully prepared, with officials nationwide instructed to remain on standby to handle any disruptions. Despite recent floods affecting over a dozen private power projects and cutting 105 MW of production, state-run plants remain unaffected. Nepal earned Rs 8.64 billion from electricity exports to India and Bangladesh in the first two months of FY 2024/25, up 10.5 percent.