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:

FATF Keeps Nepal on Grey List, Citing Gaps in Money Laundering and Terrorism Financing Controls:
The Financial Action Task Force (FATF) has decided to retain Nepal on its grey list, noting persistent deficiencies in addressing money laundering and terrorism financing risks. Despite Nepal’s high-level commitment in February 2025 to the FATF and Asia Pacific Group (APG), the global watchdog said progress remains insufficient. FATF urged Nepal to deepen understanding of ML/TF risks, strengthen oversight of banks, cooperatives, casinos, and real estate, and act against hundi operators. It also called for more prosecutions, better coordination among authorities, and stronger asset seizure mechanisms. Nepal must also fix technical gaps in terrorism and proliferation financing sanctions frameworks.

NEA Cuts Power to 18 More Industries:
The Nepal Electricity Authority (NEA) has disconnected power to 18 additional industries since Friday night for failing to settle dues related to dedicated and trunk line services, following earlier cuts to six others. Companies affected include Panchakanya Steel, Goenka Foods, Cosmos Cement, Bishal Cement, and Jagdamba Synthetic Textiles, among others. NEA spokesperson Rajan Dhakal said total arrears exceed Rs 8 billion. While some firms have begun paying in installments, others have filed legal challenges, claiming they did not use such lines. The disconnections follow NEA’s September 28 notice and comply with the Electricity Tariff Collection Rules, 2078 BS.

DoED Approves 10 Hydropower Projects Worth 241.5 MW in First Quarter of FY 2025/26:
The Department of Electricity Development (DoED) has approved construction permits for 10 hydropower projects with a combined capacity of 241.5 MW in the first quarter of the current fiscal year. Major approvals include the 132 MW Lower Barun, 28.9 MW Hongu Khola, 24.92 MW Induwa Khola, and 13 MW Upper Seti I projects. Additionally, 185 projects have been granted survey permits, while 59 others, totaling 10,532 MW, are awaiting approval. In the solar sector, 12 projects with 84 MW capacity have received construction permits. The DoED also revoked construction and survey licenses for 144 inactive or non-compliant projects.

EIA Underway for 335 MW Humla Karnali Second Hydropower Project in Remote Humla District:
Preparatory work has begun for the 335 MW Humla Karnali Second Hydropower Project in Humla district, with the Environmental Impact Assessment (EIA) currently in progress. The Ministry of Forests and Environment initiated the study following recommendations from the Ministry of Energy, while Ruru Hydropower Project will oversee construction. Spanning 47.13 hectares in Kharpunath and Sarkegad rural municipalities, the project lies within the glacier-fed Karnali River Basin. It will feature two diversion tunnels of 545 and 542 meters, each 9.5 meters wide, and is expected to generate 1,794.72 GWh annually. Power will be transmitted to Mugu via a 20-km 400 kV line.

Investors Lose Rs 282 Billion in Market Slump After Gen Z Movement Disruptions:
Nepal’s stock investors lost Rs 282 billion in market value within six weeks following the Gen Z movement, as the NEPSE index fell from 2,672.25 on September 8 to 2,503.85 on October 19. Market capitalization dropped to Rs 4.185 trillion from Rs 4.467 trillion. Brokers attributed the decline to weakened investor confidence amid unrest, natural disasters, and regulatory instability. The hotel and tourism sectors suffered heavily, while floods and landslides damaged several hydropower companies. Insurance firms face Rs 25 billion in claims, and banks are burdened with excess liquidity. Protests at NEPSE and SEBON further deepened uncertainty in the secondary market.

Social Security Fund Coverage in Nepal Reaches 2.57 Million Workers:
Nepal’s Social Security Fund now covers 2,576,476 workers under contribution-based and social security schemes, showing steady growth. In the last fiscal year alone, 882,946 new workers were registered, with 22,076 employers participating. While formal sector workers dominate coverage—640,000 enrolled—informal sector participation remains extremely low at just 794. Over 1.93 million migrant workers contribute due to mandatory pre-departure enrollment, though regular contributions are inconsistent. The fund has collected NPR 9.3 billion, mostly earning interest in banks instead of being invested productively. Health services have been expanded, with co-payment coverage of up to NPR 1 million, and plans aim to extend full family health coverage within four years.

Electric Vehicle Imports Surge as Diesel and Petrol Vehicle Demand Declines in Nepal:
Electric vehicles (EVs) are rapidly replacing traditional diesel and petrol vehicles in Nepal due to rising fuel prices and high maintenance costs. Customs data from Birgunj shows EV imports soaring: 229 electric cars and jeeps worth NPR 68.75 crore were imported in three months of FY 2081/82, up 136% from 97 units worth NPR 14.49 crore last year. Electric motorcycles also increased from 1,481 to 2,194 units. Meanwhile, diesel and petrol four-wheelers dropped 24% in the same period. Major EV suppliers include India’s Tata Motors and China’s BYD, which is expanding sales and charging networks. Rising EV adoption is expected to reduce Nepal’s petroleum imports long-term.

Government to Cover Losses Uninsured by Finance System from Janajati Protests, Says Finance Minister:
Finance Minister Rameshwar Khanal stated that the government will bear losses from the Bhadra 23–24 Janajati protests that cannot be covered by insurance or financial systems. Speaking at a Nepal Economic Journalists’ Forum (NAFJ) event on economic recovery, Khanal said loans and insurance cover some damages, but gaps remain for losses beyond market and financial mechanisms. Official damage assessments are underway, and once collected, the government will provide support to affected businesses through grants or soft loans. The minister emphasized that the current government aims to ensure recovery within its term, preparing policy groundwork for the next administration.

Fuel Imports Worth Rs 4.48 Billion Enter Nepal via Kakarvitta in First Quarter:
The Kakarvitta border checkpoint in Jhapa recorded petroleum imports worth over Rs 4.48 billion in the first three months of the fiscal year 2025/26, according to the Mechi Customs Office. Imports included petrol, diesel, LPG, aviation turbine fuel (ATF), and kerosene. Petrol topped the list with 26,320 kiloliters worth Rs 2.32 billion, followed by diesel worth Rs 1.26 billion. Cooking gas imports totaled Rs 620.81 million, ATF Rs 202.6 million, and kerosene Rs 37.9 million. Imports rose by 1.30 percent compared to last year, while revenue from petroleum products increased by 3.20 percent, reaching Rs 68.09 million.

Hyatt Regency Kathmandu Shuts Down Indefinitely After Vandalism During Gen Z Protests:
Hyatt Regency Kathmandu, a premier five-star hotel in Boudhanath, has announced an indefinite closure following vandalism and arson during the Gen Z protests on Bhadra 23–24. The incidents caused extensive damage to the hotel’s structure, equipment, and security systems. Management has suspended all operations until repairs and reconstruction are complete, requesting staff to stay away for safety reasons. Established in 2000 with 303 rooms, the hotel is a key destination for domestic and international tourists, government guests, and conferences, providing direct employment to around 500 people. Its closure is expected to significantly impact Nepal’s tourism sector.

Nepali Army Deploys Over 9,000 Troops to Protect National Parks and Wildlife:
The Nepali Army has deployed 9,046 personnel across 12 national parks, one wildlife reserve, and one hunting reserve to strengthen conservation and anti-poaching efforts. Director of Operations Manoj Thapa said eight battalions, two forest and environmental protection battalions, and seven independent companies are engaged in the mission. This fiscal year alone, authorities seized 42 firearms, 1,976 nets, 1,965 homemade weapons, 335 vehicles, and 16 hunting trophies. Enhanced protection has led to significant rises in tiger and rhino populations—now 355 and 752 respectively. The Army has lost 116 personnel in conservation duties and continues mountain cleaning campaigns to preserve Nepal’s natural beauty.

Government Grants Approval for Three New Power Transmission Lines This Fiscal Year:
The Government of Nepal has approved the construction of three power transmission lines so far this fiscal year. The Department of Electricity Development under the Ministry of Energy, Water Resources, and Irrigation has permitted the 75 km Nalgad–Maintada line in the Bheri corridor, capable of transmitting 2,400 MW, to be built by the National Transmission and Grid Company. Additionally, 33 kV Khurunga Khola (4.8 MW, 4.38 km) and Super Sardi Khola (2.9 MW, 3.68 km) lines have received approval. To date, 274 lines have been authorized for construction, with eight more under survey permissions and multiple projects awaiting approval applications.

Cross-Border QR Payments in Nepal Exceed Rs. 40 Crore Monthly:
One year after the launch of cross-border QR payments in Nepal, foreign visitors are paying over Rs. 40 crore monthly via digital platforms. The Nepal Rastra Bank currently allows only foreigners to make QR-based payments in Nepal, with transactions mostly through India’s Unified Payments Interface (UPI) and China’s Alipay and WeChat. In the first two months of the current fiscal year, foreigners paid around NPR 77 crore via QR, with most transactions at hotels and restaurants in Kathmandu, Pokhara, and other tourist hubs. Cross-border QR adoption is highest in Bagmati and Gandaki provinces, reflecting tourism patterns.

Nepal’s Insurance Business Surges Over 81% in a Month:
Nepal’s insurance sector recorded remarkable growth, with total premiums rising over 81% from Shrawan to Bhadra in the current fiscal year 2082/83. According to the Insurance Authority, companies collected Rs. 44.28 billion in premiums by Bhadra, up from Rs. 24.41 billion in Shrawan. Life insurers saw a 79.77% increase, while non-life insurers surged 88.62%. The number of life insurance policies issued rose 84.81%, and non-life policies more than doubled, increasing 101.16%. Growing public awareness of insurance and recurring natural disasters have boosted the market. By Bhadra, 49.19% of Nepal’s population was covered, up from 42.92% the previous year.

Nepal Accelerates Preparations for COP-30 to Highlight Climate Losses:
With the 30th UN Climate Change Conference (COP-30) scheduled in Belém, Brazil from November 10–21, Nepal has intensified preparations. The conference will focus on fossil fuel reduction, biodiversity protection, sustainable agriculture, social development, and technology transfer. Nepal plans to present findings from the recent “Sagarmatha Dialogue,” emphasizing Himalayan conservation, climate-induced loss, adaptation, mitigation, carbon finance, and Paris Agreement Article 6 issues. Drafting of the national position paper is near completion. Nepal will likely participate at the ministerial level, led by Agriculture and Livestock Development Minister Dr. Madan Prasad Pariyar. Experts stress the need to press for global compensation for climate-induced damages affecting countries like Nepal.

Economy Shows Strong Indicators on Paper, but Real Activity Remains Weak:
Despite strong economic indicators such as rising remittances, exports, and foreign exchange reserves, Nepal’s real economic activity remains sluggish. Private sector credit growth is minimal, industrial activity slow, and consumer spending declining. In the first two months of the current fiscal year, remittances surged 33%, yet investment and job creation have not picked up. The recent Gen Z movement caused losses of Rs. 240 billion, further weakening investor confidence. Experts emphasize that sustainable growth requires policy stability, a business-friendly environment, and active private sector participation to translate strong indicators into real economic development.

Nepal’s Youth Are Fleeing Abroad in Record Numbers:
With limited job opportunities, political instability, and poor investment conditions, an increasing number of Nepali youths see foreign employment as their only option. Over 90,000 Nepalis received new labor approvals abroad in just two months of the current fiscal year, while remittance inflows surged 33.1% to Rs 352.08 billion. Despite possessing labor, skills, and energy, Nepal lacks an enabling environment for youth employment and entrepreneurship. Bureaucratic hurdles, corruption, and unclear policies deter investment, driving industries and capital overseas. Experts warn that unless Nepal ensures political stability, investment-friendly policies, and skill-based education, its most valuable resource—its youth—will continue to leave.

Record Tourist Influx in Mustang After Tihar: Over 6,800 Visitors in a Single Day:
Mustang district witnessed a record 6,859 tourists on Friday, the first day after Bhai Tika, with 6,506 domestic and 353 foreign visitors entering via the Beni–Jomsom road, police reported. The surge brought 2,168 vehicles into the district in a single day. Between October 17–23, 20,509 tourists arrived, while since Shrawan, total arrivals have reached 118,589. Crowds also filled Muktinath Temple, where authorities deployed security, volunteers, and medical teams. Despite the boom, hotels—around 300 in total—struggled to accommodate all visitors. FNCCI’s Rajup Prasad Lalchan said Mustang’s growing popularity and improved road connectivity have made it a major festival tourism hub.

Hotels in Simkot and Hilsa Earn Rs 70 Million from Kailash–Manasarovar Pilgrimage Season:
Hotels in Simkot and Hilsa earned nearly Rs 70 million during this year’s four-and-a-half-month Kailash–Manasarovar pilgrimage season. According to Hotel Entrepreneurs’ Association president Mim Bahadur Tamang, 6,407 pilgrims—mostly from India—traveled through Humla between April and early July, each spending at least Rs 10,500 on accommodation. Earnings per hotel ranged from Rs 1.05 million to Rs 7.875 million, with Tamang’s Hotel Potal alone making Rs 7.8 million. Tourism entrepreneurs say the season marked a strong recovery after the COVID-19 slump. The Hilsa border reopened on April 30, 2024, allowing Indian pilgrims to resume the short and scenic Humla route.

Farmers in Banke Embrace Modern Machines for Rapid Paddy Harvest:
Farmers in Banke district are intensively harvesting paddy using modern combine harvesters as the monsoon ends and weather conditions improve. With 36,500 hectares under cultivation, many have adopted mechanized harvesting to overcome labor shortages and ensure timely collection before Tihar and Chhath festivals. Machines that cut, thresh, clean, and collect grains simultaneously have significantly reduced manual labor. Loknath Burma of Nepalgunj said the technology has made farming more efficient and time-saving despite the initial investment. The Agricultural Knowledge Centre, Banke, reports rising machine adoption in Khajura, Kohalpur, and Duduwa, helping farmers finish harvesting faster and store crops safely.