Nepal's Economic Landscape: A Week of Gains, Growth, and Growing Pains

NEPSE's Ascent Continues

The Nepal Stock Exchange (NEPSE) continued its upward trajectory, surging by 41.43 points (1.58%) to close at a healthy 2,663.30. This positive momentum follows a similar rise in the previous session, signaling continued investor confidence.

Trading was brisk, with a volume of Rs. 5.22 Arba across over 55,000 transactions. Himalayan Reinsurance Limited (HRL) led the pack in turnover, while Gurans Laghubitta Bittiya Sanstha Limited (GLBSL) saw impressive gains, rising by 10%.

Gold Glitters Brighter

The price of gold in Nepal shone even brighter this week, climbing by Rs. 1,300 per tola to reach Rs. 174,800. Silver also saw a modest increase, reaching Rs. 2,020 per tola. These fluctuations reflect ongoing global trends impacting precious metal markets.

Budgetary Brainstorming and Policy Prioritization

The Ministry of Finance engaged in crucial budget planning discussions with 16 ministries, setting the stage for the fiscal year 2082/083 BS. Finance Minister Bishnu Prasad Paudel emphasized the need for impactful policy reforms over simply increasing budgetary allocations.

The minister urged ministries to prioritize impactful projects, avoid smaller initiatives under Rs. 3 million, and present realistic proposals to create a more robust and effective budget framework.

Power Partnerships and Energy Security

Nepal secured a significant boost to its energy security with India agreeing to supply an additional 600 MW of electricity during peak evening hours. This welcome addition complements the existing 1,004 MW provided during daytime solar hours.

Energy Minister Khadka reassured the nation of uninterrupted power supply, dismissing rumors of potential power cuts, and emphasizing the importance of this partnership in addressing seasonal shortages.

Financial Vulnerabilities and Rising Concerns

Despite the positive developments, concerns linger over rising bad loans in the banking sector. The number of blacklisted individuals has seen a sharp increase, with over 37,000 added to the list in just eight months.

Experts warn of potential liquidity and profitability challenges for banks if these trends are not addressed effectively. Meanwhile, a growing trade deficit with Bangladesh adds another layer of complexity to the economic landscape.

Empowering Women and Local Enterprise

The 8th International Women’s Trade Expo 2025 opened its doors in Lalitpur, celebrating female entrepreneurship and promoting local businesses. Prime Minister KP Oli inaugurated the event, emphasizing the crucial role of women in driving economic progress.

The five-day expo, showcasing businesses from 72 districts, championed the theme "Eat Local, Wear Local, and Support Local Entrepreneurship," highlighting the importance of supporting homegrown businesses.

Other Key Developments

Several other significant developments marked the week, including the Supreme Court's upcoming review of the NEA leadership dispute, NEA's approval of 5,000 MW PPAs, and NRB's on-site inspections of commercial banks.

Nepal also celebrated earning Rs. 4.83 billion from carbon trading, a testament to the nation's commitment to green energy. However, employee unions at NEA voiced concerns over recent power purchase and discount policies.