Nefport 61

Page 1


Issue 61: March 2025

Publisher: Nepal Economic Forum Website: www.nepaleconomicforum.org

P.O Box 7025, Krishna Galli, Lalitpur – 3 Nepal Phone: +977 1 554-8400 Email: info@nepaleconomicforum.org

Contributors:

Anurag Gupta

Bibhuti Kharel

Heykha Rai

Mahim Shrestha

Mahotsav Pradhan

Nasala Prajapati

Prakriti Shree Adhikary

Pransu Khakurel Rojan Joshi

Sanjit Tuladhar

Sarahna Khadka

Sujal Budhathoki

Peer Reviewers: Arya Awale

Rojesh Bhakta Shrestha

Sujeev Shakya

Special Section – Authors:

Dr. Menuka Karki, Researcher, High-Level Economic Reforms Commission

Dr. Pradeep Panthi, Research Fellow, Policy Research Institute

Rameshore Khanal, Former Secretary, Ministry of Finance and Chairperson, High-Level Economic Reforms Commission

Design & Layout: Thuprai Solutions support@thuprai.com

Coordinators:

Pransu Khakurel and Suyasha Shakya

Cover Design: NEF Team

Editor:

Suyasha Shakya

This issue of Nefport takes into account news updates from March 1, 2025 to May 31, 2025.

The USD conversion rate for this issue is NPR 137.07 to a dollar, the quarterly average for this issue.

Reproduction is authorized provided the source is acknowledged. The views and opinions expressed in the article/publication are those of thenomic Forum. Neither the organization nor any person acting on their behalf may be held responsible for the use which may be made of the information contained therein.

Executive Board Members:

Sujeev Shakya

Advisory Board: Elisabeth von Capeller

Francois-Xavier Leger

Giuseppe Savino

Kenichi Yokoyama

Prativa Pandey

Saloni Sethia

Shraddha Gautam

Sneh Rajbhandari

Senior Fellows: Aman Pant

Bibek Raj Kandel Bibhakar Shakya

Sijan Thapa

Suman Basnet

Editorial

international, shaped Nepal’s economic and geopolitical landscape. Chief among these were the ongoing tariff trade wars between major global economies, renewed clashes between India and Pakistan, and the escalating a growing climate of global uncertainty, disrupting international trade and diplomacy, and affecting global markets, commodity prices, and energy security. For a country like Nepal, which heavily relies on imports, foreign aid, India and Pakistan place the country in a sensitive diplomatic position.

Meanwhile, a recent nationwide transport strike highlighted the enduring transport associations opposing new government policies aimed at liberalizing route permits, brought public mobility to a near standstill in several cities, including Kathmandu. Thousands of commuters were stranded, goods delivery was delayed, and daily economic activities were disrupted. This incident once again exposed the government's limited enforcement capacity when dealing with long-standing monopolistic practices. Despite repeated efforts over the years, including legal bans on syndicates and commitments to promote competition, such transport cartels continue to operate with considerable and consumer protection.

Additionally, the ongoing visa scandal brought to light systemic corruption within Nepal’s bureaucratic and political institutions. Investigations have unauthorized visas in exchange for bribes, compromising the integrity of the country’s immigration system. This scandal has prompted widespread responsible for migration and visa management. Beyond the immediate legal these institutions and highlighted the critical need for comprehensive reforms in Nepal’s visa and immigration processes.

During the review period, the government also released the budget for FY 2025/26 AD (2082/83 BS). In order to make this budget more accessible to and accessible summary of the federal budget aimed at helping the public understand key allocations and priorities. While this effort aimed to bridge the gap between complex government documents and citizen awareness, the federal budget itself fell short of being a tool for transformation. Despite an elaborate report submitted by a high-level committee offering bold

procedural, and unambitious decisions. What could have been a pivotal moment became, yet again, a routine exercise.

Against this backdrop of economic challenges, a positive development emerged in October 2024, when the Government of Nepal established a high-level commission chaired by former Finance Secretary Rameshore Khanal. Tasked with recommending reforms for the country’s economic transformation, the commission submitted a 447-page report to the Ministry of Finance and, on May 19, 2025, Nepal's Council of Ministers made a historic decision by approving an action plan to implement the recommendations of the Commission. Thus, this edition of NEFport includes a special section on 'Reforms 2.0,' exploring how the Commission was formed, what it accomplished, and what will it take to turn its different dimensions of the reform journey. Rameshore Khanal, Chairperson of

the genesis and urgency behind the reform initiative. Dr. Menuka Karki, Policy Researcher with the Commission, explores strategies for sustainable natural resource utilization as a cornerstone of economic transformation. Finally, Dr. Pradeep Panthi, Research Fellow at the Policy Research Institute, examines the structural challenges that must be addressed to achieve meaningful economic transformation. Together, these contributions offer a comprehensive perspective on Nepal's reform agenda and the path toward building a more resilient, productivity-based economy.

As always, we would like to express our gratitude to everyone who has contributed voluntarily, as well as to our readers and patrons who have supported and engaged with us throughout our journey.

We are working continuously on recalibrating our NEFports to make them more useful to our readers. Please feel free to write to us at info@nepaleconomicforum. org or to any of our social media handles for any further comments or feedback.

1 General Overview

Political Overview

In this quarter, from March to May 2025, Nepal faced a complex political landscape characterized by rising social unrest, intensifying corruption investigations, and continued diplomatic efforts. Following the earlier period witnessed a marked escalation in pro-monarchy protests that exposed lingering tensions over Nepal’s republican transition. At the same time, several highpublic concerns over governance and accountability. Amid these domestic challenges, Nepal’s foreign relations at strengthening regional ties and addressing security issues. Together, these developments underscored the fragile balance between political stability, institutional integrity, and Nepal’s evolving role in the South Asian geopolitical landscape.

Violent Pro-Monarchy Protests

Escalate in Kathmandu

In late March 2025, Nepal witnessed a surge in promonarchy protests led by royalist and Hindu nationalist groups. A major rally on March 29, 2025 in Kathmandu even turned violent when protesters attempted to breach the Federal Parliament perimeter, resulting in two deaths and over 100 injuries.7 Authorities accused Durga Prasai of inciting the unrest and evading arrest, prompting a crackdown that led to the detention of 105 individuals,

including Rastriya Prajatantra Party (RPP) leaders Rabindra Mishra and Dhawal Shumsher Rana.8 Consequently, on May 29, royalist groups launched a second phase of demonstrations drew thousands of participants and remained largely peaceful, though party leader Kamal Thapa was arrested.9 Meanwhile, the Ministry of Home Affairs reiterated warnings against demonstrations in restricted zones and promised stricter enforcement.10 The growing momentum of the pro-monarchy movement,

selective historical memory, and widespread dissatisfaction with Nepal’s current political order.11 As noted by Himal South Asia, this resurgence underscores the country’s unresolved transition from a Hindu kingdom to a secular republic, shaped by internal disillusionment and external pressures.12 While economic hardship and political stagnation structural constraints, including mass youth outmigration and

large-scale protests, limit the movement’s sustainability. Moreover, symbolic links to monarchy persist in Nepal’s republican framework, as political

cultural and institutional spaces once reserved for the royal family. Although dissatisfaction with the current system is growing, many, especially those who lived through monarchy, believe that a return to monarchical rule offers no substantive solution to Nepal’s pressing need for accountable and inclusive governance.

Visit Visa Scandal Sparks Political Turmoil

On May 25, Nepal’s Ministry of Home Affairs launched an internal investigation after former Deputy Superintendent of Police Govinda Panthi alleged political interference in a major visit visa corruption case. Panthi claimed that while investigating irregularities involving 1,641 suspicious passports, he was abruptly transferred under prompting him to call for a judicial commission to probe systemic corruption within the immigration system.13 Reports in mainstream and social media linked this corruption network to the private secretariat of Home Minister Ramesh Lekhak, fueling growing demands for his resignation. Although party leaders maintained there was no conclusive evidence directly connecting Lekhak to the scandal, the Commission for the Investigation of Abuse of Authority (CIAA) uncovered a wide-reaching corruption network that led to the dismissal of Immigration Department Chief Tirtharaj Bhattarai. Lekhak

expressed willingness to resign if necessary, but internal divisions within his Nepali Congress party left the issue unresolved. Since the scandal broke on May 28, opposition lawmakers from the Communist Party of Nepal (Maoist Centre), Rastriya Swatantra Party, Rastriya Prajatantra Party, and Communist

have repeatedly disrupted parliamentary sessions, intensifying pressure on Lekhak.14 This case heightened scrutiny of Nepal’s immigration policies and revealed deeper governance weaknesses, highlighting the challenges in tackling corruption within key state institutions.

Nepal Telecommunications Authority Faces Corruption Probe over Teramcos

On May 15, 2025, the Commission for the Investigation of Abuse of case against 16 individuals for irregularities in the procurement

Monitoring and Fraud Control System (Teramocs) for the Nepal Telecommunications Authority (NTA).15 The case was submitted to the Special Court in Kathmandu

former minister Mohan Bahadur Basnet, former law secretary Dhanraj Gyawali, former NTA chairmen Digambar Jha and Purushottam Khanal, several NTA directors, and two private companies, namely Vanrise Solutions and Connection Trade Link Pvt. Ltd. The CIAA alleged that reports and showed favoritism while also allowing unauthorized access to personal data during the procurement process.

These actions, according to the commission, compromised the integrity and transparency of the entire procurement procedure. As a result, the CIAA sought NPR 3.22 billion (USD 23.49 million) in damages for losses suffered by the government.16 of overstepping his authority by bypassing established procurement rules and violating a Supreme Court order, which led to the automatic suspension of his position in the House of Representatives.

Former PM Madhav Kumar Nepal Among 93 Charged in Patanjali Land Scam

On June 6, the Commission for Investigation of Abuse of Authority against former Prime Minister Madhav Kumar Nepal and 92 others in connection with a land scam involving Patanjali Yogpeeth and Ayurveda Company Nepal in Kavrepalanchok.17 This marked the

became involved in a corruption case in Nepal. The CIAA accused Nepal, who was suspended from Parliament, of abusing his and 2011 by facilitating illegal land acquisitions that exceeded legal limits and approving resale through Cabinet decisions. Alongside Nepal, the case named four former ministers, representatives from Patanjali’s Nepal operations, alleging that undervalued transactions were used to evade taxes exceeding NPR 400 million (USD 2.91 million). The commission sought a 13-year prison sentence for Nepal and recovery of NPR

185.5 million (USD 1.35 million) in damages.18 Meanwhile, Nepal denied the allegations, called the case politically motivated, and accused his rivals of attempting to undermine his political career.

Supreme Court Upholds Rabi Lamichhane’s Custody in Cooperative Fraud Case

On May 23, the Supreme Court upheld Rabi Lamichhane’s judicial custody in the cooperative fraud case by rejecting a habeas corpus

Paudel, noting that the existing evidence did not support his innocence.19

earlier remand orders issued by lower courts under Justice Nahakul Subedi and Justice Balkrishna Dhakal, emphasizing the seriousness of the allegations against him. The case involves accusations that Lamichhane, chair of the Rastriya Swatantra Party, misappropriated NPR 25 million (USD 182,000) from the Suryadarshan Multipurpose Cooperative during his tenure as chairman. Earlier in May, the Patan High Court’s Hetauda bench

Lamichhane’s appeal of the NPR 5.4 million (USD 39,000) bail granted by the Chitwan District Court in February.20 Meanwhile, the Pokhara High Court, responsible for overseeing the cooperative case, postponed its hearing in mid-May, leaving the matter unresolved with the status “hearing continued.” Following the Supreme Court’s ruling, the Kathmandu District Court

would remain in custody until proceedings concluded.21

Senior BJP Leader Visits Kathmandu to Reinforce Bilateral Ties Amid Regional Tensions

Vijay Chauthaiwale, head of the foreign affairs department of India’s ruling Bharatiya Janata Party (BJP), visited Kathmandu from April 30 to May 2, 2025, where he held meetings with key

Minister KP Sharma Oli, former Prime Ministers Pushpa Kamal Dahal and Madhav Kumar Nepal, and leaders from the Nepali Congress.22 The visit took place shortly after a terrorist attack in Jammu and Kashmir that killed 26 people, including one Nepali citizen. Against this backdrop, Chauthaiwale’s visit focused on strengthening political ties and enhancing cooperation on regional security.23 His discussions emphasized shared concerns over cross-border

broader diplomatic push to align neighboring countries on key strategic issues.

Prime Minister’s Thailand Visit Focuses on Bilateral Cooperation

reinforcing Nepal’s diplomatic engagement in Southeast Asia.24 In Bangkok, he held bilateral meetings with Thai Prime

two sides sought to broaden cooperation in trade, investment, energy, education, and tourism. A major outcome of the visit was the signing of eight memoranda of understanding,

including the launch of a foreign secretary-level consultation mechanism designed to facilitate ongoing dialogue.25 Both governments emphasized increasing private sector involvement, enhancing cultural exchange, and strengthening regional connectivity. The visit also prioritized the development of Buddhist heritage tourism, building on shared religious and cultural linkages.26 The agreements and exchanges concluded during the visit underscored Nepal’s commitment to deepening ties and fostering sustainable partnerships across the region.

Aftab Alam Acquitted in Rautahat Blast Case

On May 28, 2025, the Birgunj bench of the Janakpur High Court acquitted Nepali Congress leader Mohammad Aftab Alam, his brother Mohammad Mahtab Alam, and two others of all charges related to the 2008 Rautahat bomb blast case.27 The case involved a bombing in Rautahat district that killed two people and injured many others. The defendants faced accusations of orchestrating the blast and burning 11 injured victims alive in a brick kiln to conceal evidence. Earlier, the Rautahat District Court sentenced them to life imprisonment based on these allegations. However, after reviewing the case, the high court found that the prosecution failed to prove their guilt beyond a reasonable doubt, leading to the overturning of the earlier verdict. The trial experienced multiple challenges, including

response, and the killing of a key witness, which complicated the investigation.28 In 2019, the Supreme Court intervened and ordered the arrest of the

Outlook

accused after years of stalled legal proceedings. Despite the acquittal, the ruling sparked strong discontent among the victims’ families and human rights groups, who criticized the judicial process and questioned the state of accountability and justice in Nepal.29

Nepal is navigating a turbulent political phase marked by widespread protests and growing public dissatisfaction with existing governance structures. The rising momentum of promonarchy demonstrations alongside civic pushback against policy changes, such as new ride-

judicial probes, posing risks of broader political fallout for the ruling coalition. As pressure mounts, the government’s capacity to deliver meaningful reforms and rebuild public trust will be critical. This period offers both a test and an opportunity: effective leadership could reinforce Nepal’s democratic foundations, while failure to address these challenges may deepen societal divisions and prolong instability.

International Economy

The international economy in this review period was shaped by escalating trade tensions, shifting alliances, and geopolitical unrest. United States President Donald Trump’s aggressive tariff policies triggered global retaliation and legal pushback, injecting uncertainty into global trade. Simultaneously, China expanded its the Belt and Road Initiative (BRI), while developing nations struggled with debt repayments as the debt burden between India and Pakistan, and ongoing wars in Ukraine and the Middle East, further strained global stability.

with North America and Asia hit the hardest. As a result of all these developments, the International Monetary Fund (IMF), in its April 2025 update, downgraded global growth to 2.8% due to rising trade tensions. Consequently, globally. Amid these challenges, the IMF emphasized the need for careful monetary policy and leaders stressed cooperation to restore stability in the meeting of the foreign ministers of G7 nations.

ECONOMIC UPDATES

U.S. Tariff Policy Developments Create Global Uncertainty

shifts occurred in U.S. trade policy under President Trump, marked by escalating tensions and a subsequent judicial intervention. Following the previous quarter’s tariff announcements, the United States implemented a revised

tariff regime that triggered retaliation from major trading partners, including China, Canada, Mexico, and the European Union. Tensions peaked on April 2, 2025, when the administration imposed a blanket 10% baseline tariff on all imports, along with

as 34% on China, 25% on South Korea, 24% on Japan, and 20% on the European Union, declaring the day “Liberation Day” as a

symbolic assertion of economic sovereignty.35 However, the latter part of the quarter saw a reversal in tone, as bilateral negotiations led to a 90-day truce and a suspension of the tariffs.36 Shortly after, a federal court ruled that the President had exceeded his authority under the 1977 International Emergency Economic Powers Act (IEEPA), ordering the administration to begin rolling back the measures

within 10 days.37 Although these developments marked a temporary de-escalation, they left the future direction of U.S. trade policy uncertain, with potential implications for global trade stability.

China Deepens Latin America Ties with Belt and Road Initiative Expansion

Colombia formally joined China’s Belt and Road Initiative (BRI), the country’s foreign policy and signaling deeper Chinese 38 The move was announced during the China-Community of Latin American and Caribbean States (CELAC) Forum in Beijing, where Colombian President Gustavo Petro hailed the agreement as a historic step toward greater investment, technological cooperation, and sustainable development. The Belt and Road Initiative (BRI), launched by China in 2013, is a statebacked global infrastructure program through which Beijing has extended billions of dollars in loans to fund development projects across Asia, Africa, and the Americas. These projects range from schools and hospitals to highways, railways, ports, and power plants, aiming to enhance connectivity and economic integration. However, as many of these loans reach the end of

burden on recipient nations is mounting. In 2025 alone, China is poised to collect a record USD 22 billion (NPR 3.02 trillion) in debt repayments from 75 of the world’s poorest and most vulnerable countries.39 This surge

in repayments is placing severe threatening essential spending on healthcare, education, and climate resilience in several developing economies.

in South Asia, Eastern Europe, and the Middle East

In the past quarter, the world grappled with multiple highgeopolitical tensions. Tensions between India and Pakistan rose after 26 people were killed in a terror attack in Jammu and Kashmir's Pahalgam on April 22, 2025.40 As a result, India accused Pakistan-based terror group, The Resistance Front (TRF) and launched “Operation Sindhoor,” targeting nine camps in Pakistan and Pakistan-occupied Kashmir. Though both sides agreed to a

remained high, with sporadic violations reported.41

Meanwhile, the Russia-Ukraine war, ongoing since 2022, showed no sign of resolution as Russia called for direct peace talks in Turkey, while Ukraine demanded 42 The Middle East was also in turmoil with Israel continuing to engage in deadly

Hezbollah in Lebanon, and the Iran-backed Houthis in Yemen.43 Tensions in the South China Sea

up militarization and clashing with Philippine and Vietnamese vessels over disputed territories. These ongoing wars strained global economies by driving up defense spending, damaging infrastructure, reducing GDP growth in affected regions,

disrupting energy and food supplies, and worsening humanitarian crises.

INTERNATIONAL TRADE UPDATES

Global Manufacturing Activity Slows, While Europe Shows Signs of Recovery

The GEP Global Supply Chain Volatility Index, which surveyed 27,000 businesses, reported that April 2025 saw the sharpest decline in global manufacturing purchases this year, led by contractions in North America and Asia.44 This downturn caution, as manufacturers scaled back orders in response to anticipated demand slowdowns linked to tariff uncertainties. In Asia, manufacturing activity fell to its lowest level since December 2023, with countries such as China, Taiwan, and South Korea reporting increased spare capacity amid factory slowdowns. The buildup of unused capacity was consistent with data from March, which showed spare parts availability at its highest point since the COVID-19 peak, indicating weakening momentum across supply chains.45 Stockpiling patterns also shifted, with a decline observed in March followed by a renewed uptick in April, underscoring the volatility in inventory strategies. In contrast, Europe showed early signs of recovery, as the end of its industrial recession supported improving supply chain utilization, particularly in Germany and France. Nonetheless, the overall outlook remained fragile, with further deterioration in global trade conditions posing

continued risks to supply chain stability.

ILO Revises Global Employment Forecast Downward

The International Labour Organization (ILO) revised its global employment forecast for 2025, lowering projected job creation from 60 million to 53 million due to a weaker global economic outlook.46 This in employment growth from 1.7% to 1.5%, aligning with the IMF’s reduced global GDP forecast of 2.8%. The ILO warned that escalating geopolitical tensions and rising trade disruptions could further pressure labor markets, particularly the 84 million jobs globally linked to U.S. consumer demand, 56 million of which were region. Canada and Mexico faced the highest exposure, with 17.1% of their employment at risk from declining U.S. demand. The ILO’s World Employment and Social Outlook report also noted a decline in the global share of labor income, which fell from 53% in 2014 to 52.4% in 2024, translating to nearly USD 1 trillion (NPR 137 trillion) in lost wages.47 Although high-skilled job opportunities increased, driven in part by greater female participation, occupational segregation and educational mismatches remained persistent challenges. Nearly 25% of jobs globally were projected to be reshaped by generative AI, with high-skilled roles facing the greatest risk of automation. While some regions showed signs of labor market recovery, continued and trade tensions threatened employment growth, particularly

in manufacturing and exportdependent sectors.

Exporters Seek New Markets Amid Ongoing Trade

Tensions

Chinese exporters increasingly shifted focus away from the United States as escalating trade tensions overshadowed recent tariff relief measures negotiated in Switzerland. A survey by Allianz Trade, covering 4,500 exporters across major economies, found planned to reduce their reliance

growing uncertainty in bilateral trade relations.48 This sentiment aligned with broader trends, as both Chinese and American companies took parallel steps to relocate production and diversify supply chains. Southeast Asia, particularly Indonesia, gained traction as a preferred destination for such shifts, while in Europe, previously underutilized supply chain capacities in Germany and France began tightening due to rising output.49 As production realigned globally, Allianz Trade estimated that ongoing trade disruptions could lead to a loss of up to USD 305 billion (NPR 41.84 trillion) in exports in 2025, underscoring the far-reaching implications of sustained geopolitical frictions.50

KEY HIGHLIGHTS OF INTERNATIONAL REPORTS

World Economic Outlook Reports Uncertain Global Economic Growth

The International Monetary Fund (IMF), in its World Economic Outlook Update released on April 14, 2025, revised its global growth projections due to rising trade tensions and policy uncertainty.

In January, the IMF had forecast stable global growth at 3.3% for both 2025 and 2026.51 However, the introduction of sweeping U.S. tariff measures, followed by retaliatory actions from major trading partners, pushed effective U.S. tariff rates to their highest level in a century. These developments disrupted global

to growth, and increased policy unpredictability. As a result, the IMF provided a "reference forecast" based on information available as of April 4, which revised global growth downward to 2.8% for 2025 and 3% for 2026, a combined reduction of 0.8 percentage point.52 U.S. growth was projected to slow to 1.8%, 0.9 percentage point lower than the January forecast, while euro area growth was expected at 0.8%. Growth in emerging markets was forecast at 3.7%, with sharper slowdowns anticipated in tariffimpacted economies like China.

was projected to decline more slowly than previously expected, reaching 4.3% in 2025. The IMF also emphasized the need for central banks to carefully adjust monetary policies in response to slower growth, while urging governments to address long-term structural issues such as aging populations and shrinking workforces. It stressed that international cooperation remained essential to maintaining global economic stability and supporting recovery in the coming years.

GLOBAL EVENTS

G7 Finance Ministers and Central Bank Governors Meeting Commences

Finance ministers and central

bank governors of the Group of Seven (G7) convened in Banff, Alberta, from May 20 to 22, 2025, to address mounting challenges.53 Alongside representatives from Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, the meeting also featured Ukrainian Finance Minister Sergii Marchenko and heads of major international organizations, including the International Monetary Fund (IMF), World Bank Group (WBG), Organisation for Economic Cooperation and Development (OECD), Financial Stability Board (FSB), and Financial Action Task Force (FATF). A central concern throughout the discussions was the rise in trade tensions, particularly in light of recent tariff measures introduced by the United States.54 Several ministers underscored the urgent need for dispute resolution to reduce policy uncertainty and safeguard global growth. In parallel, geopolitical risks remained a key topic, with Ukraine urging

Outlook

continued economic pressure on Russia. In response, the G7 warned that further sanctions

was not achieved.55 Despite these challenges, the meeting concluded on a note of cautious optimism, as participants coordinated action and laid the groundwork for the G7 Leaders’ Summit, set to take place in Alberta from June 15 to 17, 2025.56

Cardinal Robert Prevost Elected as Pope Leo XIV through the Papal Conclave

The papal conclave to elect the 267th pope began on May 7, 2025, following the death of Pope Francis. A total of 220 cardinals gathered in Rome, with 133 under the age of 80 eligible to vote.57 Delegates came from across the globe, with the largest contingents from Europe, Asia, and the Americas. The conclave, held in the Sistine Chapel, followed a traditional process of daily voting rounds until a two-thirds majority was achieved. Black smoke from the

no decision, but after just over 24 hours, Robert Francis Prevost, a Chicago-born cardinal with decades of service in Peru, was elected pope.58 He assumed the name Pope Leo XIV, becoming

of the Order of Saint Augustine to lead the Roman Catholic Church. His election drew global attention, and his inaugural address emphasized unity, peace, and justice. According to the Unimpresa study centre, the period from April 21, the day of Pope Francis’s death, through the end of the conclave on May 9 brought an economic impact to Vatican City estimated between EUR 342 million and EUR 576 million (NPR 51.29 billion and NPR 87.39 billion), with a central estimate of EUR 451.5 million (NPR 68.49 billion).59

to fuel uncertainty and disrupt markets. The United States’ aggressive tariff policies triggered widespread backlash and trade disruptions, and although a temporary truce and court ruling paused these measures, lingering mistrust among trading partners is likely to prolong instability in global

Initiative deepens economic ties in the region, yet rising debt concerns in participating countries

supply chain shifts toward Southeast Asia, especially Indonesia, reshaping manufacturing and trade

The International Monetary Fund’s downgraded global growth outlook signals that the recovery

will be uneven and prolonged. In this complex environment, the recent G7 meeting underscored the importance of multilateral cooperation and policy coordination to restore stability, support resilient supply chains, and mitigate economic risks ahead of the 2025 G7 Leaders’ Summit. Going forward, navigating these interconnected challenges will require strategic diplomacy and adaptive economic policies to manage uncertainties and foster sustainable global growth.

2 Macroeconomic Overview

Macroeconomic Overview

Between March and May 2025, Nepal’s macroeconomic landscape showed renewed signs of stability and growth. GDP growth rebounded to 4%, reversing last year’s the back of rising remittances. Particularly, remittance contributed to record-high foreign exchange reserves of NPR 2.42 trillion (USD 17.65 billion). The trend of surging net foreign direct investment (FDI) seen in the previous review period continued, with FDI commitments lower than committed amounts. Notably, this review period was also marked by the release of the budget for FY 2025/26 AD (2082/83 BS). An NPR 1.965 trillion (USD 14.33 billion) budget was announced, which was 5% larger than the previous budget. Flagship initiatives in the budget included increased funding to the Ministry of Sports, and tax concessions for IT exports and startups. Additionally, foreign aid commitments continued to grow, with a large portion of funds being directed to the by 6.4%, reaching NPR -1,121.34 billion (USD -8.18 billion) compared to NPR -1,053 billion (USD-7.68 billion) in the same review period last year.

According to the Nepal Rastra Bank (NRB)’s ‘Current Macroeconomic and Financial Situation Based on Nine Months Data of 2024/25’ report, the Gross Domestic Product (GDP) projection for FY 2024/25 AD (2081/82 BS) at current prices stood at NPR 6.1 trillion (USD 44.4 billion).60 This indicated a 7% increase in GDP from the

(2080/81 BS). The size of the GDP in current prices expanded modestly, growing by over 40% in NPR terms between FY 2020/21 AD (2077/78 BS) to FY 2023/24 AD (2081/82 BS). In terms of growth rate, Nepal’s last 10-year (2015-2025) average real GDP growth stands at 4.08%, with a 5.5% growth projected for 2026 by the IMF.61

Figure 1. GDP in current years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (based on annual data, FY 2023/24 AD (FY2080/81 BS))

The Consumer Price Index (CPI) reached 3.4% in mid-April compared to 4.6% in the same period last year, as reported by the central bank.62 NRB targeted 2024/25 AD (2081/82 BS) and has

Figure 2. Year-on-year CPI change, disaggregated by food and non-food components (mid-April 2025)

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2024/25 AD (2081/82 BS)

The Consumer Price Index (CPI) is a measure that tracks the average change over time in the prices paid by consumers for a basket of goods and services. It

thus far successfully maintained 63

Figure 2 depicts the year-on-year changes in CPI disaggregated by food and non-food components as of mid-April 2025. Besides the NRB, the World Bank’s bi-annual Development Update for April 2025 projected the CPI for FY

2024/25 AD (FY 2081/82 BS), to moderate to 5.4%, with further moderation projected for the 64 CPI is expected to moderate to 5% in FY 2025/26 AD (FY2082/83 BS) and to 4.5% the following year.65

goods and services consumed by households across the country. Items like cereals, vegetables, clothes, health, and other essential necessities

are included. Table 1 illustrates the CPI along with patterns of consumption over the last two years, ending mid-April.

Table 1. Consumer Price Index over Two Consecutive Years (in percentage)

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2024/25 AD (2081/82 BS)

As depicted in Table 1, the witnessed a decrease from 4.61% in mid-April 2024 to 3.39% in mid-April 2025.66 The decline was attributed to a slight fall in the prices of vegetables, meat 67 However, there were notable increases in the prices of ghee and oil, fruits, in the non-food and services category, on the other hand, reduced from 4.2% to 3.9% during the review period.68 Clothes and footwear, and alcoholic drinks saw modest price rises with 7% and 6%, respectively.69

Budget Highlights for FY 2025/26 AD (2082/83 BS)

On May 29, 2025, Finance Minister Bishnu Poudel presented the federal budget for FY 2025/26 AD (2082/83 BS).70 As compared to the previous year’s budget, there was a 5% growth, with this budget amounting to NPR 1.964 trillion (USD 14.3 billion), the largest on record.71 The budget was within the budget ceiling set by the National Planning Commission (NPC), which recommended a ceiling of NPR 1.965 trillion (USD 14.33 billion).72 As part of the budget, NPR 1.12 trillion (USD 8.61 billion) was allocated for

recurrent expenditure, while received allocations of NPR 407 billion (USD 2.97 billion) and NPR 375 billion (USD 2.74 billion).73 This expenditure composition was similar to the previous year’s budget in percentage terms, as depicted in Figure 3. As shown in Figure 4, the government planned to raise NPR 1.31 trillion (USD 9.58 billion) in revenue income, mobilize NPR 53.4 billion (USD 390 million) in grants, and borrow NPR 596 billion (USD 4.35 billion).74 of NPR 595.6 billion (USD 4.35 billion) was projected.75

Notable developments in the budget included a doubling of the budget allocation for sports, the highest on record.76 Special initiatives for digital infrastructure development and AI Literacy were also announced, which received an allocation of NPR 740 million (USD 5.4 million). Additionally, tax breaks were provided to IT, clean energy, and startups.77 Further, a 75% income tax waiver was provided on revenue earned from IT exports, while startup enterprises with an annual turnover of NPR 100 million (USD 730,000) were announced to enjoy a zero78

On the contrary, taxes on alcohol

and tobacco products were increased.79

national government, i.e. money transfers that help provinces and local governments with their expenses, marginally increased to NPR 595.6 billion (USD 4.35 billion).80 The government also announced plans to disburse a portion of these funds based on sub-national governments’ performance on accurate spending practices.81

At the federal level, the Ministry of Education, Science, and Technology (MoEST), and the Ministry of Home Affairs received the largest allocations of NPR 211.1 billion (USD 1.54 billion) and NPR 208.6 billion (USD 1.52 billion), respectively.82 The Ministry of Physical Infrastructure and Transport received the thirdhighest allocation of NPR 151.9 billion (USD 1.11 billion). Meanwhile, ministries overseeing women's affairs and law and justice received the smallest allocations.83

Figure 3. Comparison of Expenditure Composition for the Budgets of FY 2024/25 AD (2081/82 BS) and FY 2025/26 AD (2082/83 BS)

Source: Budget Speeches of FY 2024/25 AD (2081/82 BS) and FY 2025/26 AD (2082/83 BS), Ministry of Finance, Government of Nepal

Figure 4. Source of Funds for the FY 2025/26 AD (2082/83 BS) Budget

Source: Budget Speech FY 2025/26 AD (2082/83 BS), Ministry of Finance, Government of Nepal

GOVERNMENT FIGURES84

Government Reserves

According to the ‘Current Macroeconomic Financial Situation ending mid-April 2025’ report, the gross foreign exchange reserves stood at NPR 2.4 trillion (USD 14.36 billion) as of mid-April 2025. The foreign reserves saw an 18.9% surge when compared to NPR 2 trillion (USD 11.5 billion) in mid-July 2024. Of the total foreign exchange reserves, those

held by the NRB increased by 15.6%, rising from NPR 1.8 trillion (USD 10.08 billion) in mid-July 2024 to NPR 2.1 trillion (USD 12.63 billion) in mid-April 2025. Meanwhile, reserves held by (BFIs) grew by 50%, from NPR 192 billion (USD 1.45 billion) in midJuly 2024 to NPR 290 billion (USD 1.68 billion) in mid-April 2025.

Based on the imports of nine months of FY 2024/25 AD (2081/82 BS), the foreign

exchange reserves of the banking

to cover the prospective merchandise imports of 17.1 months, and merchandise and services imports of 14.2 months. Meanwhile, the ratio of reserves-to-GDP, reserves-toimports, and reserves-to-M2 stood at 39.7%, 118.7%, and 32.8%, respectively, in mid-April 2025. Such ratios were 35.8%, 108.6%, and 29.3%, respectively, in midJuly 2024.

Particular

Table 2. Reserves-to-GDP Ratio in mid-April of the Last Three Years (in %)

Source: Current Macroeconomic and Financial Situation of Nepal (based on ninemonth data of FY 2024/25 AD (2081/82 BS)

The reserves-to-GDP ratio has been rising over the last three

2. This trend indicates that foreign reserves are increasingly of GDP, primarily driven by

Figure 5. Gross Foreign Exchange Reserves as of Mid-April for the Last Seven Fiscal Years (in NPR trillion)

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2021/22 AD (2078/79 BS) to FY 2025/26 AD (2082/83 BS))

Government Debt

Nepal's domestic debt encompasses various forms, such as treasury bills, development bonds, citizen saving bonds, and foreign employment bonds. These debts are managed by Nepal Rastra Bank (NRB), along with commercial banks,

institutions. As of mid-April 2025,

remittances, the largest source of foreign exchange in Nepal. Additionally, the trend of gross foreign exchange reserves as of

years is shown in Figure 5. It is noticeable that there has been

a steady growth in the size of foreign exchange reserves over more than doubled during this period.

the total domestic debt taken 2024/25 AD (2081/82 BS) stood at NPR 1.29 trillion (USD 9.5 billion) compared to NPR 1.17 trillion (USD 7.6 billion) in mid-April 2024.85 This represents a 10% annual increase. Table 3 illustrates the trend of total domestic debt in

Additionally, external debt reached NPR 1.25 trillion (USD

9.12 billion) in mid-April 2025, with a surge of 14.7% from 1.17 trillion (USD 8.6 billion) in mid-April 2024.86 The reason behind the growing debt is the government's liquidity crunch, rising recurrent expenditure, and revenue collection shortfalls. The World Bank noted that revenue collections in Nepal rise at the

the government to take on debt mid-year to meet its operations.87

Table 3. Domestic Government Debt as of Mid-April in the Last Three Fiscal Years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (based on ninemonth data of FY 2024/25 AD (2081/82 BS)

Government Spending

According to the data from NRB,

2024/25 AD (2081/82 BS), the total government expenditure stood at NPR 998.5 billion (USD 7.28 billion), while the total revenue was NPR 831.3 billion (USD 6.06 billion).88 Table 4

data as of mid-April 2025.

Table 4. Government Expenditure and Revenue in the First Nine Months of the Last Two FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data of FY 2024/25 AD (2081/82 BS)

Capital and recurrent expenditures both increased by about 10% compared to 89

This increase in capital and recurrent expenditure was attributed to factors such as the implementation of improved practices and the increasing use of IT tools in budget management. Additionally, by 29%, highlighting increased activity in debt management.90 Further, on a positive note, total revenue generation improved by 11%, with tax collection up by 10% and non-tax revenue by 13%.91 This put the government’s revenue on a modest footing since tax collections generally year, offering increased scope for revenue collection.

FOREIGN DIRECT INVESTMENT

2024/25 AD (2081/82 BS), NPR 8.96 billion (USD 65.4 million) foreign direct investment (equity only) was received.92 In the same period of the previous year, (equity only) amounted to NPR 6.49 billion (USD 47 million). This 93

One reason for the rise could be attributed to the government’s decision last year to reduce the minimum threshold for foreign investors from NPR 50 million (USD 300,000) to NPR 20 million (USD 150,455),

Figure 6. Net Foreign Direct Investment (FDI) in Nepal until Mid-April for Five Consecutive FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (based on annual data, FY 2023/24 AD (FY2080/81 BS))

FOREIGN ASSISTANCE

Government Releases Foreign Aid Mobilization Policy 2025

In early May 2025, The Government of Nepal released the Foreign Aid Mobilization Policy 2025 to improve the effectiveness and alignment of foreign assistance with national priorities.97 The policy aims to

thereby incentivizing smallscale investments. When viewed over the last three years, foreign direct investments have more than tripled, increasing from NPR 2.8 billion (USD 20.4 million) in FY 2022/23 AD (2079/80 BS) to NRP 8.96 billion (USD 65.4 million) in FY 2024/25 AD (2081/82 BS).94

the Investment Board Nepal (IBN) launched its Strategy and Business Plan FY 2024/25 AD (2081/82 BS) in May, targeting the completion of 11 projects worth USD 8.95 billion by FY 2028/29 AD (2085/86 BS).95

The board claimed that even if the full target is not met, it aims

projects with a total value of USD 4.7 billion (NPR 644.43 billion) within the timeframe. Its broader pipeline spans 57 projects worth up to USD 24.30 billion (NPR 3.3 trillion) for feasibility studies and 52 projects valued at USD 23.50 billion (NPR 3.22 trillion) moving to the procurement stage. By FY 2028/29 AD (2085/86 BS), the board aims to have seven projects worth USD 2.83 billion (NPR 388.90 billion) at the construction stage, with 14 projects worth up to USD 5.55 billion (NPR 760.68 billion) approaching completion.96

address coordination challenges by promoting aid mobilization through federal structures and encouraging public-private partnership (PPP) models such as viability gap funding to reduce

AD (2080/81 BS), foreign aid utilization remained below 15%, highlighting persistent

a result of this, the policy requires international non-governmental organizations (INGOs) to align projects with national and local development plans, coordinate with the Social Welfare Council, and engage local governments during implementation. Additionally, the removal of blanket tax exemptions on foreign-funded projects seeks

to enhance transparency and 98 The policy

away from grant dependency in anticipation of its graduation from Least Developed Country (LDC) status in 2026, which will reduce access to concessional

Aid Commitments on the Rise

of FY 2024/25 (mid-August 2024 to mid-March 2025), Nepal secured foreign aid commitments amounting to NPR 221.99 billion (USD 1.62 billion), more than double the

when total commitments had reached only NPR 101.19 billion (USD 738.12 million).99 Of the total commitments received in the current reporting period, 25.7% was in the form of grants, while the remaining 74.3% comprised loan assistance. Sectoral analysis reveals that the energy sector attracted the highest share of aid commitments, accounting for 25.4% of the total. The environment and climate sector followed, representing 21.7% of total pledged support.100

USAID Halt Affects Foreign Assistance in Nepal

In March 2025, USAID’s contribution to Nepal’s development landscape experienced a major setback following the suspension of USD 500 million (NPR 68.54 billion) in funding by the Millennium Challenge Corporation (MCC).101 The aid freeze had a

infrastructure projects, including the construction of a 200mile, 400kV transmission line intended to enhance crossborder electricity trade with India.102 In addition to halting progress in the energy sector, the suspension disrupted other key initiatives such as the USAID Health Direct Financing Project and the Agricultural Direct Financing Project, valued at USD 25 million (NPR 3.43 billion) and USD 21 million (NPR 2.88 billion) respectively. These disruptions posed considerable challenges to ongoing efforts in health and agriculture.

GRANTS AND CONCESSIONAL LOANS

IMF Completes Fifth Credit Review for Nepal

On March 12, 2025, the International Monetary Fund review of Nepal’s four-year Extended Credit Facility (ECF) arrangement, unlocking a disbursement of approximately SDR 31.4 million (USD 41.8 million or NPR 5.73 billion).103 This brought total disbursements under the facility to SDR 219.7 million (USD 289.1 million or NPR 39.62 billion). The IMF noted that, despite political uncertainty and the economic disruption caused by the September

tangible progress in advancing key structural reforms.104 Looking ahead, the IMF projected real GDP growth at 4.2% for FY 2024/25 AD (2081/82 BS), supported by increased capital expenditure on reconstruction, accommodative monetary policy, and additional external support.

REMITTANCE AND MIGRATION

continued on an upward

months of FY 2024/25 AD (2081/82 BS). According to data from the NRB, total remittances reached NPR 1.191 trillion (USD 8.68 billion) in mid-April 2025, marking a 10% year-on-year increase.105 In U.S. dollar terms,

billion, moderating from the 17.2% growth recorded in the same year.106 Additionally, gross foreign exchange reserves increased to NPR 2.4 trillion (USD 17.52 billion) during the review period.107

accelerated, driven largely by a surge in imports and increased spending on foreign education.

Government Launches Plan to Replace Migration with Internal Employment

The Government of Nepal declared 2025 to 2035 AD (2082 to 2092 BS) as the Internal Employment Promotion Decade with the objective of reducing dependence on foreign employment by creating more domestic job opportunities.108 The announcement was made during the National Labour and Employment Conference 2081, held from May 7 to 9, 2025, where government representatives emphasized the need for collaborative efforts to expand internal employment. As part of this initiative, the government signed memoranda of

understanding with ten privatesector umbrella organizations across sectors such as ICT, hospitality, construction, and garments to promote employment generation and skills training.109 In addition, a joint agreement was signed with the Swiss Agency for Development and Cooperation to support the expansion of the labor market information system under the Prime Minister’s Employment Programme.110 The Internal Employment Promotion Decade is expected to strengthen labor market planning and contribute to long-term economic stability by fostering private sector engagement and improving

the quality and accessibility of domestic employment.

TRADE STATUS

Foreign Trade Scenario

2024/25 AD (2081/82 BS), Nepal’s total foreign trade increased to NPR 1.497 trillion (USD 10.92 billion) from NPR 1.28 trillion (USD 9.34 billion) in the corresponding period of FY 2023/24 AD (2080/81 BS).111 Total foreign trade experienced positive growth of

compared to the -2.9% change in FY 2023/24 AD (2080/81 BS).112 Both imports and exports drove this growth. Exports rose

by 65.2%, reaching NPR 188.2 billion (USD 1.37 billion), which accounted for 12.6% of total trade.113 Meanwhile, merchandise imports also increased by 12.2%, amounting to NPR 1.3 trillion billion (USD 9.55 billion), and making up 87.4% of total trade.114 Continuing the trend, India remained the largest trading partner, accounting for 62.5% of total trade, followed by China with 16.7%, and the remaining 20.8% with other countries.115 Trade with China, however, saw a slight decline from 17.1% in FY 2023/24 AD (2080/81 BS), as trade with other countries increased.116

Figure 7. Total Annual Foreign Trade for the Past Three FYs

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2024/25 AD (2081/82 BS) 117

Top Imports and Exports

Similar to the previous year, Nepal continued to import petroleum products in the highest volume, accounting for 16% of total imports. Following petroleum products, the other equipment and vehicle parts (5.1%), crude soybean oil (5%), other machinery parts (4.5%), and sponge iron (2.9%).118 In exported by Nepal during the

AD (2081/82 BS) were soybean oil (33.4%), polyester yarn and thread (5.3%), woollen carpets (4.3%), zinc sheets (4%), and cardamom (3.3%).119

The largest growth in imports was seen in crude soybean oil, which increased by 499.6%, while the export of rosin recorded the highest growth on the export side, rising by 58.3%.120 On the other hand, imports of chemical fertilizers decreased by 14.1%, while exports of palm oil (67.8%), zinc sheets (13.2%), and

readymade garments (10.3%) also declined during the review period.121 Electricity imports dropped from NPR 9.512 billion (USD 69.41 million) to NPR 6.601 billion (USD 48.16 million), while aviation fuel exports surged from NPR 9.656 billion (USD 70.45 million) to NPR 11.072 billion (USD

nine months of FY 2024/25 AD (2081/82 BS).122

Figure 8. Total Imports, Exports, and Trade Balance during the First Three Months of the Last Five FYs

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2024/25 AD (2081/82 BS) 123

Balance of Trade

Nepal continued to struggle

2024/25 (2081/82 BS), reaching NPR -1,121.34 billion (USD -8.18 billion) compared to NPR -1,053 billion (USD-7.68 billion) in the corresponding period of the previous year.124 However, the export-import ratio improved to 14.4% in the review period, up from 9.8% in the same period last year.125 This indicates that Nepal is exporting relatively more goods and services than before, even though the country still it exports. In terms of the trade balance, Nepal continues to have the largest trade imbalance with India, although its relative share is declining. India’s share in the trade balance decreased to 56.7% in FY 2024/25 AD (2081/82 BS) from 61.9% in FY 2023/24 AD (2080/81 BS), as its share in Nepal's total exports

rose to 79.7%, up from 68.3% the previous year.126 Meanwhile, the share of other countries in the trade balance increased to 21.4% from 17.7%, as the exports to the rest of the world declined to 19.1% from 29.8% in the same period last year.127 The share of China in the trade balance remained relatively stable at 21.9% during the nine months in FY 2024/25 AD (2081/82 BS).128

Gold/Silver Updates

According to the Federation of Nepal Gold and Silver Dealers' Association, the price of standard gold reached a record high at NPR 197,900 (USD 1,444.34) for 11 grams as of late April 2025.129 This was the maximum price of gold recorded in this quarter.

in response to changes in the international market, which also Gold imports increased by 9.7%, totalling NPR 19.46 billion

nine months of FY 2024/25 AD (2081/82 BS), compared to NPR 17.74 billion (USD 129.44 million) during the same period last year.130

Similarly, the price of silver also recorded NPR 2010 (USD 14.96) per tola in early March, which was the maximum for this quarter. The change in price of silver is 131

Fiscal Years (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2024/25 AD (2081/82 BS)132

Exchange Rate

The Nepali currency depreciated by 2.92% against the USD from 2025.133 The buying exchange rate

Figure 10. Average Selling Rate of USD in

Fiscal Years

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine-month data, FY 2024/25 AD (2081/82 BS) 136

per US dollar stood at NPR 137.37 in mid-April 2025 compared to NPR 133.36 in mid-July 2024.134

Of the total foreign exchange reserves, the reserves held by the central bank increased by 15.6%

to NPR 2136.46 billion (USD 15.59 billion) in mid-April 2025 from NPR 1848.55 (USD 13.48 billion) 135

Figure 9. Gold Import

Outlook

Nepal’s economic outlook for the upcoming year is expected to show moderate performance,

1.964 trillion budget focused on infrastructure, digital development, and social sectors. However, the government’s success with revenue generation and expenditure is yet to be seen. Remittances levels achieved during the pre-COVID period. Overall, the economy is expected to perform better

3 Sectoral Review

Agriculture and Livestock

developments this quarter, which spanned from March to May 2025. The government allocated NPR 57.48 billion (USD 419 million) programs such as insurance, subsidies and infrastructure development, though this was

year. A particular focus was on fertilizers, with the government offering an NPR 28.82 billion (USD 210 million) subsidy to import chemical fertilizers. On the other hand, scandals also emerged in the sector, as Nepal Rastra Bank (NRB) uncovered widespread misuse of loans in the agriculture sector. On the output side, farmers, especially in poultry and dairy, production recently received some welcome relief through rising prices and government support. Regionally, Nepal also loosened its import restrictions on some dairy imports and signed a new agricultural cooperation Memorandum of Understanding (MoU) with India.

Top 3 agricultural commodities imports (based on nine months' data ending in midJanuary 2024/2025)145

Top 3 agricultural commodities exports (based on nine months’ data ending in midJanuary 2024/2025)146

Soyabean oil: NPR 62.78 billion (USD 457.9 million)

Cardamom: NPR 5.46 billion (USD 45.7 million)

Juice: NPR 5.26 billion (USD 26.0 million)

PRODUCTION UPDATES

Farmers Relieved as Egg Prices

Rise

Farmers forced to sell eggs at low prices in the past few months felt some relief in the past quarter as prices increased due to summer heat reducing egg production.147 The Nepal Layers Poultry Farmers Association, which sets the support price for eggs, announced the farm price for an extra-large egg crate of 30 eggs at NPR 480 (USD 3.5).148 Likewise, large eggs were priced at NPR 465 (USD 3.39) per crate and medium eggs at NPR 435 (USD 3.17) per crate. This was an increase of NPR 15 (USD 0.11) per crate compared to previous prices. Five months ago, daily production was around 40,000 cartons of eggs, but it fell to approximately 25,000 cartons. Thus, rising feed costs and low egg prices forced many farmers to sell hens and prevented them from rearing new chicks. With fewer laying birds and higher demand, prices steadily climbed. Therefore, while farmers were still not able to fully recover their costs, with a production cost of NPR 16.56 (USD 0.12) per egg, they faced considerable relief due to the price rise.149

Supply of Chemical Fertilizer to be Increased to 600,000 Metric Tons

In its budget speech for FY 2025/26 AD (2082/83 BS) at the joint session of the federal parliament, the government announced its decision to increase the supply of chemical fertilizer to reach 600,000 metric tons.150 According to the decision, NPR 28.82 billion (USD

210.1 million) will be allocated as a subsidy to import chemical fertilizer and preparations will be made to establish chemical fertilizer factories through the Investment Board.151 NPR 400 million (USD 2.9 million) was also allocated for an organic agriculture promotion program to maintain soil quality and boost productivity. Further, it was announced that production would be promoted on cultivable fallow land along the Pushpalal Mid-Hill Highway and Madan Bhandari Highway. Under this initiative, funds were allocated to expand cash crops, animal husbandry, high-value fruits, non-timber forest products, grass, and agroforestry systems.

Government Lifts Ban on Select Dairy Imports

The government lifted a partial ban on certain dairy items, such as whey and cheese, from India on May 29, 2025, permitting imports of products that are not produced domestically or only in limited quantities.152 This decision followed a request from the Indian government at the India-Nepal Inter-Government Committee on Trade, Transit and Cooperation to Combat Unauthorized Trade in January.153 The ban, originally imposed in February 2024, was aimed at protecting Nepal’s domestic dairy industry in the hope of ensuring farmers received timely payments for their milk. But Nepal’s Dairy Development Corporation (DDC)

current dues nearing NPR 1 billion (USD 7.29 million) and dating back to January 2025. To combat this, the government provided DDC with a NPR 600 million (USD

4.37 million) credit facility to help settle its debts to farmers.154

LIVESTOCK UPDATES

First National Yak Day and Mountain Livestock Initiatives

On April 20, 2025, the Ministry of Agriculture and Livestock Development (MoALD) observed

time, launching new efforts to support high mountain herders.155

Speaking at the Yak Day program in Kathmandu, Agriculture Minister Ramnath Adhikari highlighted that yak farming plays a vital role in the Himalayan regions by supporting income, food nutrition, organic agriculture, and ecological balance.156 However, Nepal’s yak population has been declining in recent years due to numerous challenges because

scarcity, herder migrations to lower areas, breeding limitations, predation by wild animals, and the impacts of climate change on alpine ecosystems.157 To address these issues, the government decided to commemorate the Baisakh 7 as National Yak Day to raise awareness and recognize yaks’ cultural and economic importance.158 The Yak Day celebration is a broader push to preserve Nepal’s unique high altitude livestock and sustain the livelihoods of mountain communities.159

KEY DEVELOPMENTS

Government Allocates NPR 57.48 Billion (USD 419 Million) for Agriculture and Livestock Development for FY 2025/26 AD (2082/83 BS)

In its budget for FY 2025/26 AD (2082/83 BS) released in late

May 2025, the Government of Nepal allocated NPR 57.48 billion (USD 419 million) to the Ministry of Agriculture and Livestock Development (MoALD).160 The allocation included a wide range of programs targeting insurance, input subsidies, infrastructure, and market development.161 Further priorities included promoting organic farming, improving soil health, and boosting entrepreneurship in the agriculture sector. The budget also supported meat export through livestock development, disease control programs, and genetic improvement of animals.162 Furthermore, to improve service delivery and technical assistance at the grassroots level, the government introduced the “One Village, One Technician” scheme, which will deploy skilled personnel to every local unit to support farming operations. Additional measures included pesticide monitoring and awareness campaigns to safeguard public health and the environment, particularly in vegetable-producing districts. The budget also prioritized livestock focused programs, particularly for sheep, goat, cow, and buffalo development in regions located along major highways and road corridors in the mid-hills.163 However, despite these ambitious program announcements, the agriculture sector witnessed a 12.9% budget cut compared to the previous year, marking the second allocation.164

NRB Uncovers Misuse of Subsidized Agricultural Loans

A study by the Nepal Rastra Bank (NRB), released in May

2025, revealed widespread misuse of subsidized loans in the agricultural sectors.165 An

subsidized loan accounts revealed that NPR 21.25 billion (USD 155 million) was misused, rather than being invested in the intended agricultural sector.166 According to the report, over 30% of the subsidized credit meant for farming, livestock, and other primary industries was diverted or misallocated.167 Notably, 25.6% of borrowers in the agriculture sector were found to have misused their loans.168 Many borrowers simply used these cheap loans to pay off old debts or even obtained multiple subsidized loans fraudulently.

government announced a halt to new agricultural subsidies, citing ineffective outcomes and poor oversight. Further, authorities planned to move to tighten the rules on subsidized credit, with MoALD drafting guideline amendments to reduce the maximum loan amount from NPR 50 million (USD 364,000) to NPR 10 million (USD 72,000).169

Nepal and India Sign

Agricultural Cooperation MoU

On 9 April, 2025, Nepal and India signed a new Memorandum of Understanding (MoU) to strengthen bilateral cooperation in agriculture, replacing a nearly 34-year-old agreement from 1991.170 The MoU was signed in Kathmandu by Nepal’s Agriculture Minister Ramnath Adhikari and India’s Minister of Agriculture and Farmers’ Welfare Shivraj Singh Chouhan. Key focus points include enhancing crop productivity, improving postharvest management systems,

advancing agri-marketing mechanisms, and promoting climate-resilient and sustainable agricultural practices.171 The agreement also emphasizes climate-resilient agriculture and technology sharing, such as improving irrigation techniques and use of bio-fertilizers and bio-pesticides.172 This MoU was signed during the 3rd BIMSTEC Agriculture Ministers Meeting held in Kathmandu.173 The broader BIMSTEC meeting also endorsed

livestock, proposed a food reserve and seed bank, and saw India announce a new Centre of Excellence for Agricultural Innovation.174

Outlook

Nepal’s agriculture and livestock sector entered FY 2025/26 AD (2082/83 BS) on uncertain footing, as falling public investment and governance lapses cast doubt on future resilience. Consecutive budget cuts signaled a retreat from long-term commitments, raising concerns about whether viable. The suspension of subsidized loans following widespread misuse risked weakening already to persistent vulnerabilities in supply chains that, if unaddressed, could destabilize markets in future cycles. The lifting of the dairy import ban further exposed domestic producers to external competition, with few signs of accompanying measures to enhance competitiveness. Meanwhile, as Nepal looked to deepen cross-border cooperation through an MoU with India, the sector’s trajectory would increasingly depend on whether these partnerships translated into tangible improvements in productivity, climate adaptation, and rural livelihoods.

Education

The review period, from March to May 2025, saw multiple

end following an agreement between the federation and the government. Additionally, the allocation of a sizable budget to the sector, and the declaration of Humla as a literate state, pointed to major developments in the government announced free visas for foreign students in Nepal, the United States’ decision to halt student visas

Additionally, while Nepal University, the country’s most recent public university legally imbued with political neutrality, appointed its Vice-Chancellor and Registrar, Tribhuvan University, the country’s oldest university, faced uncertainty with the resignation of its ViceChairperson allegedly due to political interventions.

Government Reaches an Agreement with the Teachers’ Federation Amid Ongoing Education Reform Demands

On April 27, 2025, thousands of teachers from across Nepal gathered in Kathmandu to demand the immediate enactment of the long-pending School Education Act of 1971.180

Organized by the Nepal Teachers’ Federation, the protest was part of a nationwide educational strike that shut down schools and suspended all academic duties, including the preparation of examination results. The demonstration followed a rally on April 26 and a series of sit-ins at political party and education

after the Federation reached a 9-point agreement with the government, which included subsidized medical treatment at the Civil Service Hospital, lumpsum payouts for accumulated leave upon retirement, salary adjustments for Early Childhood Development (ECD) facilitators and non-teaching staff, rural allowances for temporary teachers, and inclusion in the Social Security Fund.181 The Cabinet also approved grade payments, salary parity for lower secondary teachers, and free treatment for those injured during the protests. However, it stopped short of committing to

the Federation to warn of further protests if the bill is not passed by the agreed deadline.

Budget for FY 2025/26 AD (2082/83 BS) Allocates NPR 211.17 Billion (USD 1.54 Billion) for the Education Sector

In the budget for FY 2025/26 AD (2082/83 BS), the government allocated NPR 211.17 billion (USD 1.54 billion) to the education sector, which was an increase of NPR 7.51 billion (USD 54.78 million) from the previous year. However, this represents only 10.75% of the total national budget, down from 10.94% in FY 2024/25 AD (2081/82 BS), and falls short of the longstanding commitment to allocate 20% to the Ministry of Education, Science and Technology (MoEST).182 Nonetheless, the education sector received the highest share among all ministries.

Among its various provisions, the government introduced a new 'Teachers’ Bank' in collaboration with universities to build a pool of graduate students and fresh graduates for temporary recruitment in high-demand subjects like English, Science, and Mathematics. Additionally, NPR 10.19 billion (USD 74.34 million) was allocated for the mid-day

million students, and NPR 1.29 billion (USD 9.41 million) was earmarked for sanitary pad distribution targeting 1.3 million female students. Moreover, NPR 10.16 billion (USD 74.12 million) was allocated to the Nepal Teachers’ Federation to support early childhood development assistants and school staff. NPR 2.44 billion (USD 17.8 million) was also set aside to provide scholarships for students from remote Himalayan areas and marginalized communities to pursue medical education.183

Besides this, the President’s Education Reform Program was renamed the National Education Reform Program and will now focus on infrastructure grants for large schools and a performancebased incentive scheme involving 100 schools that will mentor surrounding institutions to boost academic outcomes.184

Vice-Chancellor of Tribhuvan University Resigns After One Year

Dr. Keshar Jung Baral, appointed on February 22, 2024, as the 20th Vice-Chancellor (VC) of Tribhuvan University (TU), resigned from his position on March 31, 2025.185 His

on April 10 by the government led by Prime Minister KP Sharma Oli, came thirteen months into

his tenure. Dr. Baral, who was appointed by the previous government under Pushpa Kamal Dahal, cited deteriorating health and persistent political interference as reasons for stepping down. Following the change in government, Dr. Baral reportedly faced increasing obstruction from politically and student unions.186 His efforts to implement structural reforms, including compliance with a Supreme Court ruling mandating open competition for permanent staff appointments, met with resistance from contract employees demanding internal recruitment. The resulting pressure and lack of institutional support weakened his position. On April 13, the government appointed TU Rector Dr. Khadga KC as acting VC for a maximum period of three months.187

Nepal University Assigns ViceChancellor and Registrar

The University of Nepal, a newly established autonomous and multidisciplinary public university focused on research and innovation, appointed two the provisions of the University of Nepal Act, 2081.188 Dr. Arjun Karki, a senior physician and former ViceChancellor of Patan Academy of Health Sciences, was appointed as the Vice-Chancellor, while Dr. Suryaraj Acharya, a public policy and infrastructure expert, was appointed as the University Registrar. The appointments were made by the university’s Board of Trustees based on the recommendation of a selection committee, in contrast to the traditional practice in Nepal where the Prime Minister, who

serves as Chancellor of all public universities, appoints Vice-Chancellors.189 This was as per the Nepal University Act, 2081, through which Nepal University is the only public university in Nepal where the Board of Trustees serves as the institution’s highest governing body. Located in Bandipur, Tanahun, the University of Nepal was conceived with the aim of promoting academic excellence and fostering innovation in higher education.

Government Announces Free Visa for International Students

As part of the federal budget 2025/26 AD (2082/83 BS), the government introduced a new provision to exempt international students from visa fees for the entire duration of their academic programs in Nepal.190 In addition, parents or legal guardians of enrolled foreign students became eligible for multiple-entry visas. The initiative aims to position Nepal as a more attractive destination for higher education for international applicants. The policy was introduced alongside broader commitments to improve educational quality and institutional infrastructure, and to increase Nepal’s visibility in the global academic landscape.191

Trump Targets International Students After Trade

In late May 2025, the United States temporarily suspended student visa interview appointments as part of its decision to implement enhanced social media screening measures.192 The move created

students preparing to pursue higher education in the U.S., a

most popular destination for Nepali students in FY 2023/24 AD (2080/81 BS), with 11,261 students enrolled.193 2024/25 AD (2081/82 BS), 2,372 students had already obtained No

U.S.-based studies, underscoring the continued demand. However, recent visa restrictions and heightened scrutiny by the U.S. administration disrupted academic plans and raised concerns among students and families.194 While a federal court ruling temporarily halted parts of the policy targeting international student enrollment, the episode highlighted the vulnerability of Nepal’s outbound student population to shifting geopolitical and immigration dynamics in key destination countries.

Religious Schools in Karnali Face Dire Situation

In the past quarter, it was found that religious educational

Outlook

institutions in Karnali Province, namely Gurukuls (Hindu), Madrasas (Muslim), and Gumbas (Buddhist), faced growing operational challenges due to limited funding and poor infrastructure.195 The results were released following a fourmonth survey across the study conducted by a seven-member task force, led by the Director of the Education Development Directorate, Deepa Hamal, and comprising representatives from the religious institutions and academic experts. The task force’s report, released in April 2025, highlighted critical gaps in teacher management, salary funding, and the availability of teaching materials.196 It was reported that many schools lacked essential facilities such as toilets, libraries, laboratories, drinking water, and playgrounds, while some had shut down due

schools primarily relied on community donations and public fundraising, with little to no formal government support. Following

the report’s submission, the provincial government pledged to support the sustainable operation of religious schools, but concrete policy interventions were yet to be announced.

Humla Declared as a Literate District

On May 23, 2025, Humla district

literate zone after achieving a literacy rate of 96.04% among individuals aged 15 to 60.197 Chief of the Education Development and Coordination Unit, Shiva Raj Sharma, made the announcement all seven local levels within the district met the national threshold. As per government criteria, in order to be literate, an area must demonstrate over 90% literacy and ensure access to basic education. 198

Looking ahead, Nepal’s education sector faces both challenges and opportunities in light of the recent clash between the teachers' federation and the government. The agreement between the issues, but it remains crucial to monitor the implementation of the agreed-upon measures, including timely passing of the School Education Bill and salary adjustments for teachers. The budget allocated for education indicates a focus on critical areas such as teacher recruitment and student welfare programs, but further commitment is needed to meet the target of SDG on 20% budget allocation for education. Additionally, the safety and well-being of Nepali students studying abroad continues to raise concerns, necessitating greater oversight and support. Overall, the successful implementation of educational reforms, addressing teachers' demands on social security, healthcare, salaries, and transparent governance, will be crucial to fostering an inclusive and effective learning environment in Nepal.

Energy and Environment

This quarter, Nepal’s energy and environment sectors experienced a mix of progress and pressure. While air pollution reached hazardous levels, particularly in Kathmandu, land pollution levels show signs of some progress with the new waste management plans of the Kathmandu metropolitan. On the energy front, domestic electricity production struggled during the winter dry season, yet growth in renewable energy investments and ongoing hydropower development continued to add momentum toward long-term sustainability. Additionally, Nepal also conducted the Sagarmatha Sambaad and new policies were introduced in its climate agenda through the release of the Nationally Determined Contribution 3.0, emphasizing inclusive and resilient adaptation strategies in the years ahead.

ENVIRONMENTAL RISKS AND MANAGEMENT

Nepal Advances Climate Commitments through the NDC 3.0 Release

On May 14, 2025, Nepal released its third Nationally Determined Contribution (NDC 3.0) report under the Paris Agreement. The publication outlines the country’s climate action roadmap, focusing on key sectors such as energy, agriculture, forestry, and waste management, aiming to reduce greenhouse gas emissions by up to 25.5% through 2035. The updated NDC also places strong emphasis on inclusive adaptation strategies, urban resilience, and social equity, explicitly incorporating gender and disability rights.206 However,

about 60% of these targets depend on international

support. Furthermore, NDC 3.0 underscores the accountability of all ministries and the active involvement of federal, provincial, and local governments to ensure coordinated climate action aligned with sectoral policies.207

Air Pollution Continues to be a Growing Public Health and Economic Threat

Air pollution remained a critical concern in the past quarter, especially in urban centers like the Kathmandu Valley. Following

the previous quarter, air quality in Kathmandu deteriorated dramatically, with the Air Quality Index (AQI) reaching hazardous

levels of 348 in early April 2025, making the city the most polluted globally at that time. The pollution crisis stemmed from a combination of delayed rainfall, roads, ongoing construction activities, and the burning of agricultural residues.208 Between January and May 2025 alone, 253

across 45 districts, exacerbating the smog and posing severe health risks. As a result, the Ministry of Health and Population (MoHP) issued various advisories urging vulnerable groups to take precautions against respiratory and cardiovascular diseases linked to toxic air. Overall, air pollution claims over 40,000 lives annually in Nepal, surpassing fatalities from the 2015 earthquake, and reduces life expectancy in Kathmandu by up to 3.5 years. Beyond health impacts, the World Bank and United Nations Environment Program (UNEP) estimate that air pollution drains between 5% and 10% of Nepal’s GDP each year, equivalent to losses of up to USD 4 billion (NPR 548.28 billion).209

Progress in Waste Management: Kathmandu Metropolitan City’s Initiatives

Recognizing the link between poor waste management and environmental degradation, Kathmandu Metropolitan to improve urban waste management, a key factor in reducing pollution and promoting sustainability. Early

ranging from NPR 5,000 to 15,000 (USD 36.47 to 109.42)

for littering in public spaces, signaling a stricter enforcement approach. In order to promote and streamline proper waste disposal, the city also designated six dumping sites across all 32 wards.210 Furthermore, the City’s Environment Management Department actively implemented policies to enhance waste segregation and at the source, reducing the volume of waste transported

from 20 to 15 containers daily.211 KMC also announced plans to expand segregation practices to additional wards, with approximately 20% of segregated waste directed to Banchare Danda, and the remainder managed by service providers.

Nepal Pursues Climate Diplomacy Through Sagarmatha Sambaad

From May 16 to 18, 2025, Nepal hosted the inaugural Sagarmatha Sambaad (Everest Dialogue), bringing together international and domestic stakeholders to address climate challenges facing mountain regions. The summit focused on the theme “Climate Change, Mountains, and the Future of Humanity,” highlighting issues like glacial melt, biodiversity loss, and the socio-economic impacts on vulnerable communities. The event concluded with a 25-point Sagarmatha Call to Action, urging global efforts to limit warming to 1.5°C and calling for tailored National Adaptation Plans. It particularly emphasized the need for increased, accessible climate

countries and proposed establishing a dedicated fund to support sustainable mountain development.212 The Call to Action also promoted green, inclusive growth through clean private sector engagement, while stressing stronger partnerships for technology transfer and capacity building. Furthermore, inclusivity was a key focus, encouraging the active participation of youth, women, indigenous peoples, and marginalized groups.

PLANS AND PROGRAMS

FY 2025/26 AD (2082/83 BS) Budget Offers Stability for EV Sector

On May 29, 2025, Finance Minister Bishnu Paudel presented the national budget for FY 2025/26 AD (2082/83 BS), offering policy stability to the electric vehicle (EV) sector by keeping the existing tax rates unchanged.213 The decision came amid speculation of a potential tax hike, prompting importers to stockpile EVs in advance. The unchanged tax rates offered relief and policy stability to a growing EV market shaped by rising fuel costs, public demand for cleaner transport, and Nepal’s push to boost domestic electricity use. Although industry stakeholders hoped for further tax cuts to accelerate adoption, the government opted for continuity. To further promote EV infrastructure, the budget announced only a 1% customs duty on equipment required for setting up EV charging station

production or assembly facilities,

tax holiday. With power outputs determining EV tax brackets up from 15% to 80% in customs, and 5% to 50% in excise, the existing regime remained in supportive stance as Nepal’s green transport transition gained momentum.214

HYDROPOWER

Arun-3 Hydropower Project Nears Completion with Extension Request

In April 2025, the Energy Ministers of Nepal and India jointly visited the 900 MW Arun-3 Hydropower Project in Sankhuwasabha, in a show of promoting bilateral cooperation.215 Developed by India’s Satluj Jal Vidyut Nigam Limited (SJVN), the project reached 75-80% physical progress in the past quarter, but

transmission side, with only 30% completed. Originally scheduled for completion by March 2025, the developer requested an 18-month extension for the Commercial Operation Date (COD) to September 2026, due to land acquisition challenges and transmission delays. Arun3 is expected to generate over 4 billion units of electricity annually, with Nepal receiving nearly 22% of the output free of cost. Once operational, the project will be handed over to Nepal after 25 years, reinforcing long-term energy partnership in the region.216

RENEWABLE ENERGY

Huawei and CNI Join Forces to Spark Nepal’s Green Energy Transition

On March 10, 2025, Huawei Digital Power Nepal and the Confederation of Nepalese Industries (CNI), supported by Alternative Energy Promotion Centre (AEPC) and the Energy Regulatory Commission, hosted an event titled ‘Solar PV and Energy Storage Dialogue: Nepalese Industry’ in Kathmandu.217 The event gathered stakeholders to tackle the pressing challenge on how to decarbonize Nepal’s industries and ensure reliable energy access. The major highlight of the event, however, was Huawei’s launch of the FusionSolar C&I OASIS Solution, a system integrating solar photovoltaic (PV) systems with advanced Battery Energy Storage Systems (BESS), designed for commercial and industrial users. Targeted at commercial spaces like malls and factories, the solution offers a dependable, affordable alternative to fossil fuels. These innovations are in line with global efforts to reduce carbon emissions and contribute to building a low-carbon, circular economy.218

KEY DEVELOPMENTS

India Approves 600 MW Power Export to Nepal Amid Energy Crisis

In March 2025, the Government of India approved the export of 600 MW of electricity to

Nepal to address the country’s escalating power crisis.219 Triggered by a winter drought and seasonal decline in run-ofthe-river hydropower output, Nepal’s electricity generation had dropped to around 1,000 MW, well below its installed capacity of 3,300 MW, leading to daily load-shedding of up to 12 hours in industrial areas.220 Following a formal request from Nepal, India extended the power import window beyond the previous 6 AM to 6 PM limit. The revised arrangement allowed Nepal to import electricity from 11 PM to 4 AM and from 6 AM to 5 PM, providing 16 hours of daily supply. The power was transmitted via the MuzaffarpurDhalkebar and TanakpurMahendranagar corridors. This development builds upon the existing 25-year India-Nepal electricity trade agreement and operationalizes critical crossborder infrastructure.221

Outlook

Nepal’s energy and environment sectors are at a turning point, where urgent problems must be and dust from infrastructure projects, shows the need for stronger rules and better coordination between government agencies, especially as Kathmandu heads into a monsoon season with unpredictable rainfall. At the same time, delays in major hydropower projects like Arun-3 and frequent power shortages highlight the need to strengthen Nepal’s electricity grid and diversify energy sources. With the recent announcement of the country’s third Nationally Determined Contribution (NDC), the real challenge now lies in turning these climate promises into local action,

been made through renewable energy partnerships and incentives for electric vehicles, but wider adoption depends on clear policies and stronger collaboration with the private sector. As Nepal takes the global stage through platforms like the Sagarmatha Sambaad, the key will be to match its international leadership with meaningful change at home.

Health

The review period, from March 1 to May 31, 2025, saw notable developments in the health sector in Nepal,

became the third nation to launch its National Essential

health infrastructure and established a high containment unit to combat highly contagious viruses. Additionally, akin to the Human Papillomavirus (HPV) vaccination program in the previous quarter, this quarter witnessed the nationwide distribution campaign of Vitamin A and deworming tablets to children under 5 years of age. These initiatives were further boosted by the increase of budgetary allocation for the sector, with NPR 95.81 billion

navigated these advancements, the country also faced critical challenges such as delays in the procurement of essential health commodities and the risk from rising COVID-19 cases from India.

PLANS

AND PROGRAMS

Nepal Launches National Essential In-vitro Diagnostics List to Strengthen Public Health Infrastructure

On May 9, 2025, Nepal became the third country to adopt the National Essential In-vitro Diagnostics List (NEIDL) to outline the set of essential diagnostic tests needed to detect and manage both communicable and noncommunicable diseases, aligning with Essential Diagnostics Lists standards set by the World Health Organization (WHO).228 The list was launched

at the National Public Health Laboratory, Teku, Kathmandu aiming to enhance access to quality diagnostic services across healthcare facilities and support the national Universal Health Coverage as outlined in Sustainable Development Goals (SDGs).229 The list strives to improve healthcare access and quality by ensuring improved access to diagnostics, informed resource allocation, guidance for procurement and supply, and more. Additionally, during the program intended for this announcement, WHO also

supplied lab equipment to 25 government hospitals for enhancing the testing of bacterial culture and antibiotic sensitivity testing, while also reinforcing the surveillance of antimicrobial resistance.230

Government Conducts

Nationwide Vitamin A and Deworming Campaign for Children Amidst Challenges

The Ministry of Health and Population (MoHP) conducted a two-day nationwide campaign to administer Vitamin A and deworming tablets to around 2.2 million children below the age of

5.231 54,000 female community health volunteers were deployed across 753 local levels in this campaign that is crucial to prevent many childhood diseases and reduce mortality. The effort was part of the National Vitamin A Program launched in 1993 which has since drastically reduced night blindness in children. However, while the campaign was a success, it faced multiple obstacles as there was a failure to procure the required Vitamin A capsules on time, and the government had to rely on the United Nations Children’s Fund (UNICEF) to provide 2 million capsules.232 These delays were attributed to the rise in US dollar prices and fear of scrutiny from the Commission for Investigation of Abuse of Authority (CIAA) due to the need for purchasing low-cost medicines, further enhancing the prospect for nationwide shortages of these products.233

Budget Share for the Health Sector Increases

May 29, 2025, the Government of Nepal increased the budget for the health sector, allocating NPR 95.81 billion (USD 726 million) for FY 2082/83 BS (2025/26 AD).234

the previous year’s allocation of NPR 86.24 billion (USD 654 million).235 Notably, from the allocated budget, NPR 10 billion (USD 76 million) will be dedicated to the legal and institutional restructuring of the National Health Insurance Program.236 This includes measures to strengthen

health insurance infrastructure

insured individuals, integrating various security programs to eliminate duplication and misuse, and creating a system whereby reviews would be made by a third party to ensure payments within a year.237 Besides this, the budget also highlighted the offering of free treatment for cancer patients under the age of 14, and establishment of burn units in all the provinces.238

HEALTH RISKS

Nepal on High Alert as COVID-19 Cases Surge in India

In the previous quarter, COVID-19 cases in India saw a spike, with 4,866 active cases reported towards the end of the quarter, and 51 deaths since January 2025.239 India also reported the emergence of four new subvariants of Omicron - NB.1.8.1, LF.7, XFG, JN.1. This led to high vigilance by health workers as the spread of the virus in India could lead to potential resurgence of COVID-19 in Nepal.240 As a result of this vigilance, the Epidemiology and Disease Control Division of the Ministry of Health and Population (MoHP) in Nepal implemented various measures like consultations with public health experts, preparation of health desks to ensure surveillance, and distribution of Rapid Diagnostic Test (RDT) kits at border points to swiftly address reported symptoms.241 Despite this, however, few

in Nepal, particularly in border regions.242

KEY DEVELOPMENTS

High Containment Unit Set Up at National Public Health Laboratory

Early in May, 2025, the National Public Health Laboratory (NPHL) in Teku, Kathmandu established a high-containment unit, a facility designed to reduce the spill of bacterial and viral infections to the community.243 The main purpose of the facility is to mitigate the risk of highly contagious viruses like SARSCOV-2, Ebola, and MERS spilling into communities by neutralizing infectious viruses. The unit will also support research in pathology, immunology, and microbiology.244 NPR 40 million (USD 291,863) and technical support was provided by the World Health Organization (WHO) to set up the facility.

Outlook

The quarter witnessed notable progress in the health sector with the release of the National Essential In-vitro Diagnostics List (NEIDL) and the establishment of the high containment unit in NPHL. These developments signal a promising future for improved diagnostic quality, greater accessibility, and enhanced capacity to contain infectious diseases. Additionally, an increased

However, persistent challenges remain. A notable example was the delay in procuring essential Vitamin A tablets, which underscored Nepal’s continued reliance on international organizations such as the World Health Organization (WHO). For sustained progress, Nepal must prioritize

Information and Communication Technology

This quarter saw several new developments in Nepal’s attempt to strengthen the regulatory framework of its Information and Communications Technology (ICT) sector. In March, the Ministry of Communications and Information Technology (MoCIT) unveiled its draft Digital Nepal Framework 2.0, which builds on the 2019 framework, outlining the government’s vision of digital infrastructure and export promotion, and addressing shortcomings of the earlier edition. As part of these efforts, the government upgraded the Nagarik App to get closer to its goal of creating a one-stop online platform for government services, and Nepali delegations participated in a technology roadshow in the United States with the hope of increasing its services exports to the world’s largest outsourcing market. But other parts of the government’s approach to the ICT sector were less successful, with most social media platforms ignoring the Ministry’s directive to register their service despite threats that their operations in the country could be shut down.

Figure 11. Market Share of Telephone Operators (based on SIM subscriptions)

12. Market Share of Internet Service Providers in Nepal

Source: Nepal Telecommunications Authority, Telecommunication Indicators, Chaitra 2081

Figure 13. Broadband Service Technologies and User Distribution in Nepal Telecom Services

Source: Nepal Telecommunications Authority, Telecommunication Indicators, Chaitra 2081

Government Releases Digital Nepal Framework 2.0

On March 12, 2025, the Ministry of Communication and Information Technology (MoCIT) presented a draft of the Digital Nepal Framework 2.0 (DNF 2.0) on its website and invited feedback for a period of one week on its strategy for digital transformation.254 DNF 2.0

Framework (DNF 1.0), released in November 2019, which set out 80 initiatives in eight key areas health, education, energy, infrastructure.255 However, DNF 1.0 faced implementation hurdles with a lack of ownership, poor coordination across agencies,

of technical capability, limiting the initiative’s achievements.256 Nepal had even received a USD 140 million (NPR 19.2 billion) loan from the World Bank in June 2022 to support the Digital Nepal Acceleration Project, an initiative under DNF 1.0 which sought to expand access to broadband and increased digital connectivity. However, the funding was brought to an early closure in November

Figure

2024 due to a lack of progress.257 DNF 2.0 aims to address these challenges by developing smoother coordination mechanisms, investing in technical skills, and phasing in a prioritized implementation of digital initiatives. The framework is built on the ‘FAST’ model which includes future-ready digital foundations and digital infrastructure, such as digital ID and universal high-speed internet; access to digital services; skills and digital literacy; and transformation of the digital economy by empowering the private sector and the startup ecosystem.258 The core vision of DNF 2.0 is to create a ‘digitally empowered Nepal’ that is economically resilient for individuals and businesses, socially inclusive with equitable access to digital services for all, and climate friendly by using technology as tool for environmental sustainability.

Social Media Platforms Ignore Registration Deadline

On March 20, 2025, MoCIT issued media companies to register with the ministry.259 This notice was a continuation of the ministry’s November 2023 directive requiring social media platforms to register and establish in Nepal a point of contact, a grievance for monitoring compliance.260 On April 25, the Minister of MoCIT warned companies like Meta that they would be banned in Nepal if they failed to register within the next seven days.261 Despite this warning, on May 5, it was reported that most platforms had ignored the deadline. Gajendra Kumar Thakur, a spokesperson for the

ministry, said that the matter was under review while a study was being conducted to assess

media use.262 Finally, on May 12, it was reported that only four

WeChat, TikTok and Nimbuzz

40 organizations operating in Nepal.263

Nepal Lags Behind on Digital Inclusion

Women in Information

dedicated to advancing female representation in the ICT sector, published their report ‘Barriers to Breakthroughs: Women in Nepal’s ICT landscape’ in March 2025.264 The study, based on quantitative data through surveys with ICT

and female ICT professionals, aimed to take stock of the ICT landscape for women in Nepal. The report found that women constitute only 7.9% of the workforce in Nepal’s ICT companies and 0.5% in ICTenabled companies, despite making up 51% of the general population.265 Of the women in ICT companies, only 19.6% were found to hold managerial or executive positions. There

in the number of female ICT professionals above the age of 35, which could point to an increase in young women engaging in

social expectations with many women leaving the workforce for marriage and to raise children. Additionally, the study highlighted several factors for women’s under-representation, such as social norms around marriage and motherhood,

limited access to technical education, a lack of mentorship opportunities, and rigid working arrangements. For example, which disproportionately affects women who must balance professional commitments with personal obligations. The report also emphasized the importance of hands-on experience and mentorship and called for employers to adopt inclusive workplace policies and target their recruitment initiatives towards women.

Roadshow Presents Nepali IT Firms to the World

From March 24 to 27, 2025, Nepal participated in Tech Peak: Orlando 2025, marking the

at an international IT-enabled Services (ITES) roadshow in the United States.266 The roadshow was part of the Shared Services & Outsourcing Week (SSOW) Conference hosted in Orlando, Florida. The United States is the world’s largest IT market, and the SSOW conference draws over 1,000 industry leaders. Nepal’s participation, which featured a pavilion manned by Nepali IT and ITES companies such as Sakchha, Innovate Tech, F1 Soft, Simjung, Cynical Technology, and Monal Tech, was organized by the Confederation of Nepalese Industries and the American Chamber of Commerce in Nepal.267 The government strategized Nepal’s presence to position itself as a prime hotspot for ITES and attract international clients due to its growing IT export potential. This was based on the fact that, in 2022, Nepal exported IT services worth USD

515.4 million (NPR 70.6 billion), a 64.2% increase from 2021, and built on the government’s ‘Decade of Information Technology’ envisions IT service exports reaching NPR 3 trillion (USD 21.9 billion) within ten years, generating employment for 1.5 million people.268

Nepal Telecom, Ncell Fined for Late License Payments

Auditor General recommended a 15% penalty for Nepal Telecom (NTC) and Ncell for failing to pay their license renewal fees on time.269 According to the Telecommunications Regulation, if license fees are not paid in time, the Telecommunications Authority can impose a penalty charge.270 In line with this rule, Nepal Telecom was required to renew its license and pay the renewal fee of NPR 20 billion (USD 145.9 million) by February

Outlook

8, 2019, three months before its license expired on 8 May 2019. But the company only deposited NPR 189 million (USD 1.4 million) by the deadline and settled the remaining NPR 19.81 billion (USD 144.5 million) in May 2024.271 As

General instructed NTC to pay an additional 15% fee, totaling NPR 2.97 billion (USD 21.7 million).272 Similarly, Ncell was supposed to pay NPR 20 billion (USD 145.9 million) by 28 May 2024 for a 5-year extension to its license, but deposited only NPR 6.4 billion (USD 46.7 million).273 The 15% fee

the Auditor General now requires the company to pay an additional NPR 2.04 billion (USD 14.9 million).

Nagarik App Adds New Services

On April 18, 2025, the Minister of Communications and Information Technology, Prithvi

Subba Gurung, said that more than 100 government services will be added to the Nagarik App this year as part of the government’s efforts to provide essential services to citizens in a single online platform.274 Minister Gurung said that more than 65 services from 35 government agencies have already been linked to the app. President Ramchandra Paudel, speaking at a joint meeting of the Federal Parliament on 2 May, said that all government hospitals will soon be integrated into the app. The Nagarik App is part of the government’s strategy to promote digital public infrastructure in pursuit of the vision of a ‘Digital Nepal’, as outlined in the DNF 1.0 and DNF 2.0.275

Looking ahead, the government’s Digital Nepal Framework 2.0 offers a vision for Nepal to become widespread access to digital services, digital literacy for citizens and organizations, and a digitally emerging technologies such as AI transform the world. However, overcoming implementation will be essential. The upgrade of the Nagarik App and Nepal’s presence in global export roadshows are promising steps, but recent issues such as social media platforms ignoring ministry directives and late license payments by Ncell and Nepal Telecom show that there is a disconnect between the private sector and the government, which hinders the government’s ability to implement their plans. Finally, it is crucial that the digital transformation is inclusive and equitable, with recent studies showing that Nepal has a long way to go in ensuring that women have equal opportunities in the IT sector.

Infrastructure and Real Estate

Building on the previous quarter's focus on cross-border energy transmission and urban policy frameworks, this

infrastructure landscape with a mixed emphasis on project execution and regulatory reform. While the earlier period highlighted energy export ambitions through transmission line agreements with India and the approval of the National Urban Policy 2081 BS, the current quarter saw concrete progress in water distribution expansion, trade infrastructure development, and procurement regulation adjustments. However, the quarter was also in major infrastructure projects, underscoring persistent governance challenges that continue to plague Nepal's development efforts. The juxtaposition of ambitious planning initiatives from the Investment Board Nepal

complex reality of translating policy frameworks into tangible infrastructure outcomes.

Melamchi Phase II to Expand Water Access Beyond Kathmandu Ring Road

The second phase of the Melamchi Water Supply Project advanced this quarter with the expansion of the water distribution network beyond Kathmandu Valley’s Ring Road.277 The project, implemented by the Melamchi Water Supply Development Board and funded by the Government of Nepal with support from the Asian Development Bank, aims to extend treated water access

to municipalities including Kathmandu, Budhanilkantha, Gokarneshwor, Kirtipur, Bhaktapur, and Madhyapur Thimi.278 The expansion plan targets the construction of 875.4 kilometers of pipelines, comprising 828.92 kilometers of high-density polyethylene pipes and 46.48 kilometers of ductile iron pipes. The estimated cost of the project stands at NPR 24 billion (USD 175.1 million). As part

began in newly connected areas such as Balaju and parts of Nagarjun Municipality, where

FY 2023/24 AD (2080/81 BS) (as per annual data)276

Melamchi water is now supplied

The broader expansion responds to rising water demand driven by rapid urbanization, with the long-term goal of improving access to safe drinking water and enhancing public health outcomes across the Valley.

Government Approves Strategy and Business Plan for FY 2081 to 2086 BS (2024 to 2029 AD)

On May 1, 2025, the Investment Board Nepal (IBN) approved its Strategy and Business Plan for FY

2024/25 to FY 2029/30 AD (2081 to 2086 BS), outlining targets for infrastructure development and institutional reform.280 The board planned to operationalize 11 projects worth USD 8.95 billion by the end of the period, with at

4.07 billion (NPR 557 billion) expected to be in operation. It aimed to begin construction on seven projects valued at USD 2.83 billion (NPR 387 billion) and bring 14 projects worth up to USD 5.55 billion (NPR 785 billion) 281

To build a robust pipeline, IBN initiated studies for 57 projects worth USD 24.3 billion (NPR 3.38 trillion), moved 52 projects worth USD 23.5 billion (NPR 3.22 trillion) into procurement, and entered Project Development Agreement (PDA) or Project Investment Agreement (PIA) negotiations for 42 projects totaling USD 17.95 billion (NPR 2.46 trillion). Additionally, 32 projects worth USD 15.7 billion (NPR 2.15 trillion)

or pre-development phases. The board also introduced plans to establish four new directorates: Planning, Administration and Financial Management; PublicPrivate Partnership; Investment Promotion and Facilitation; and Project Development and Management.282 Moreover, an Organization and Management (O&M) survey was underway to support this restructuring. Despite these plans, implementation challenges persist. The gap between approved investments and actual execution remained wide. The single point of contact staff and operated ineffectively. A dedicated fund for the board has also not been established in over

12 years, and key instruments such as the Land Acquisition Fund and Compensatory Fund remain inactive. Lastly, the board continues to rely heavily on donor support, limiting its institutional capacity.283

Dodhara Chandani Dry Port Construction Commences

On May 9, 2025, construction of the Dodhara Chandani Dry Port formally began with treecutting operations at the project site in Bhimdatta Municipality, Kanchanpur district.284 Located near the Nepal-India border in the Far Western Province, the dry port was designed to enhance Nepal’s trade connectivity with Indian states such as Uttarakhand, Punjab, Rajasthan, and Haryana. As part of this initiative, twin Integrated Check Posts are planned at Dodhara Chandani in Nepal and Banbasa in India, both funded through Indian government grants.285 The port spans 43 hectares of the Mayapuri forest and is scheduled for completion within 30 months. It is expected to function as a key logistics hub, handling both containerized and bulk cargo. Initial infrastructure will accommodate up to 300 containers, with future capacity expansion to 3,000 containers, along with a 7,000-squaremeter import warehouse and a 2,520-square-meter export warehouse. The Government of Nepal allocated NPR 2.54 billion (USD 18.5 million) for the project under its national priority plan.286 Preparatory assessments date back more than 15 years, beginning with a feasibility study by the World Bank, followed by a 2016 report from

the Nepal Intermodal Transport Development Board. The site was later relocated from Ward 8 to Ward 1 of Chandani Municipality due to local opposition. Once operational, the dry port is

customs clearance times and support growing trade volumes in western Nepal.

HoR Subpanel Finds NPR

14 Billion (USD 102 Million) Embezzled in Pokhara International Airport Project

On April 18, 2025, a subcommittee under the Public Accounts Committee of Nepal’s House of Representatives reported that approximately NPR 14 billion (USD 102 million) was embezzled during the development of the Pokhara International Airport.287 a ten-month investigation led by Rastriya Prajatantra Party (RPP) Chairperson and lawmaker Rajendra Lingden.

claims for transporting soil and pebbles worth NPR 753 million (USD 5.5 million), construction of the runway at a lower unauthorized tax exemptions totaling NPR 2.2 billion (USD 16 million) that violated contractual agreements.288 The airport,

Import Bank, was constructed by a Chinese contractor and inaugurated in January 2023. Investigators also found that the project proceeded without

viability. Additionally, as per the report, the Civil Aviation Authority of Nepal (CAAN) and the Ministry of Culture, Tourism and Civil

Aviation approved procurement without competitive bidding.289 In addition, China IPPR International responsible for quality assurance and oversight, allegedly

the project site.

Government Approves Amendment to Extend Deadlines for Delayed Infrastructure Projects

On April 30, 2025, the Government of Nepal issued the 14th amendment to the Public Procurement Regulations to address persistent delays in project completion.290 Previously, under the 13th amendment,

deadlines and daily penalties for delays, with limited chances to request extensions. The new amendment eased these rules by removing daily penalties and allowing contractors to apply for additional deadline extensions even if they missed the earlier were given thirty days from the amendment’s publication in

extension requests, which had to include explanations for the delays and a revised work schedule. Authorities were required to verify these claims and respond within thirty days; if they failed to decide, the request was automatically rejected. However, projects with less than 25% physical progress remained ineligible for extensions.291

Outlook

The amendment applies to various sectors including roads, irrigation, buildings, and drinking

contracts must explicitly include defect liability and operation and maintenance periods. According to Amit Sharma, Department of Roads, about 200 out of approximately 2,100 road projects managed by the agency

the new rules. This amendment followed strong lobbying by contractors concerned about the strict penalties and cancellations imposed under previous regulations.

for Nepal's development trajectory. The expansion of Melamchi water distribution beyond Kathmandu's Ring Road and the commencement of Dodhara Chandani Dry Port construction signal positive momentum in addressing critical infrastructure gaps, particularly in water supply and institutional commitment to large-scale infrastructure development. However, the embezzlement scandal at Pokhara International Airport raises serious questions about project oversight and partnerships. Meanwhile, the government's decision to ease procurement regulations through the 14th amendment, while potentially accelerating project completion, may inadvertently weaken accountability mechanisms at a time when stronger oversight is clearly needed. Moving forward, the success of these infrastructure initiatives will largely depend on Nepal's ability to strengthen institutional capacity, improve project monitoring, and restore public trust in development processes while maintaining the momentum of critical projects that enhance connectivity and economic growth.

Tourism

This quarter, spanning March 1 to May 31, 2025, saw ups and downs in Nepal’s tourism sector. Visitor numbers declined year-on-year in March, rebounded in April and dropped again in May. Tribhuvan International Airport increased its operating hours following constructionrelated closures from November 2024 to March 2025, which may help restore growth in tourist arrivals into the future. Initiatives announced in the previous quarter, such as the Visit Pokhara Year, had mixed success with the Pokhara airport celebrating the milestone of its

becoming mired in a corruption scandal. Continuing efforts which began in the previous quarter, the government made a concerted push to attract Buddhist tourism through hosting festivals, bilateral expos, and multilateral travel forums and introduced stricter permit requirements for climbing Mount Everest to support sustainable tourism.

Tourist Arrivals in Nepal Soar in April 2025, Surpassing PrePandemic Levels

Nepal recorded 116,490 international tourist arrivals in for the month, and an increase of 4.6% compared to April 2024 and 17.9% compared to April 2023.300 Compared to April 2019, arrivals were up 6.5%. But while performance was strong in April, it comes in the middle of lower numbers in March and May. March registered a 5.1% drop compared to the previous year, while May saw visitor numbers that were 4.4% lower.301 The decreases in

partly explained by reduced operational hours at Tribhuvan International Airport, which was closed from 10 pm to 8 am every day between November 8, 2024 and April 1, 2025 due to runway maintenance and infrastructure upgrades. From January to May 2025, a total of 501,264 foreign tourists visited Nepal, a slight decrease from 506,280 in the corresponding period last year.

increase of 24% from 2023’s in the same period and sees Nepal beat its pre-pandemic

Outstanding

548.2 million (NPR 75.1 billion)

Number of registered travel agencies299 4,845

levels, when 498,775 tourists

2019. India remained the largest source of visitors, sending 28,160 tourists, followed by the United States (9,074), China (8,824), Bangladesh (4,280) and the United Kingdom (3,473).302

PROGRAMS, EVENTS, AND CAMPAIGNS

Government Promotes Buddhist Tourism Through Regional Partnerships

In this quarter, Nepal Tourism Board (NTB) increased its efforts to attract Buddhist tourism,

Figure 14. Tourist Arrivals to Nepal in April (from 2015 to 2025 AD)

Source: Current Macroeconomic and Financial Situation of Nepal (based on nine months' data, FY 2024/25 AD)319

hosting several events that leveraged Nepal’s rich Buddhist heritage. As part of this, NTB, in collaboration with the Ministry of Culture, Tourism and Civil Aviation, and the Chinese Embassy in Nepal, organized the Lumbini International Peace Festival from March 20 to May 12, 2025.303 The festival promoted Lumbini as a center for peace and spiritual tourism, featuring International Peace Marathon, Lumbini International Meditation Day, and the Lumbini Peace Concert. At the bilateral level as well, the government pursued ties with Buddhist-majority Southeast Asian countries. NTB promoted Buddhist tourism at the NepalMyanmar Trade and Tourism Expo on March 21 and 22304 and Prime

it as a promising avenue for collaboration with Thailand in his meeting with Thai Prime Minister Paetongtarn Shinawatra on 2 April.305 Additionally, the Nepal Association of Tour and Travel Agents (NATTA), in collaboration with NTB, held the third edition of the Buddhist International Travel Mart from May 23 to 25 in Kathmandu and Lumbini, bringing together 1,100 participants from India, Bhutan, China, Malaysia, Myanmar, Nepal, Sri Lanka, and Thailand.306 At the event, NATTA signed an MoU with the Indian Association of Tour Operators undertaking to increase twoway tourism, develop joint promotional campaigns, and enhance cooperation across tourism stakeholders.307

UNDP and NTB Launch Sustainable Tourism Project

NTB and the United Nations Development Programme (UNDP) launched a USD 5 million (NPR 685.35 million) Sustainable Tourism Project on March 21, 2025.308 The project, to be implemented from 2025 to 2028, plans to generate employment for local communities by upgrading tourism infrastructure, enhancing service quality, and providing skills training while promoting tourist destinations across Nepal. For the project, NTB and UNDP will contribute USD 1.5 million (NPR 205.61 million) each, and a further USD 2 million (NPR 274.1 million) will be jointly mobilized. The project builds on the Sustainable Tourism for Livelihood Recovery

Project, a joint NTB-UNDP venture which ran from 2021 to 2023 and provided short-term jobs to 6,000 tourism workers, constructed more than 60 smallscale tourism infrastructures, and gave skills training to more than 300 people.309 The new project aims to create 2,500 sustainable jobs and enhance the tourism skills of 5,000 people by upgrading tourism infrastructure and accelerating Nepal’s tourism digitalization.310

POLICIES AND REGULATIONS

Nepal Proposes Tighter Restrictions for Everest Permits

The government is currently drafting a new Integrated Tourism Bill, which would impose stricter requirements for climbers seeking to summit Mount Everest. Under the proposed bill, climbers must have previously scaled at least one 7,000-metre mountain in Nepal before they will be granted permission to attempt climbing Mount Everest.311 The law is part of the government’s efforts to increase safety and reduce overcrowding after 25 people died or went missing climbing Mount Everest in just the past two years.312 The bill also includes a condition that all expedition leaders and guides must be Nepali citizens, in an effort to support local workers who depend on trekking expeditions for their livelihood. The bill is still being developed and will be subject to parliamentary debate and approval before it is enacted.

Government Considers New Visa to Attract Digital Nomads

The government is considering implementing a new ‘digital

nomad’ visa aimed at attracting remote workers to live and work in Nepal, as per a suggestion from the High-Level Commission on Economic Reforms.313 The aim is to promote longer stays by tourists and attract individuals with strong earning potential, given that digital nomads typically have high disposable income. Under the policy, applicants would receive that permits them to live and work in Nepal, open accounts with local commercial banks, and even register their vehicles. The proposed eligibility criteria includes that applicants must have a monthly income of more than USD 1,500 (NPR 205,605) or a bank balance over USD 20,000 (NPR 2.7 million), as well as health insurance coverage of at least USD 100,000 (NPR 13.7 million).314 Visa holders would be allowed to open local bank accounts and transfer any surplus savings above USD 50,000 (NPR 6.85 million) to foreign banks while those residing in Nepal for more than 186 days in a calendar year would be subject to a 5% income tax. Additionally, to create an attractive work environment, the government plans to build physical infrastructure, such as co-working spaces to support remote work and invest in internet connectivity.

NEW DEVELOPMENTS

Pokhara Airport Sees First International Flight Amid Corruption Concerns

Pokhara International Airport experienced both achievements

of 2025. In March, Himalaya Airlines launched a new weekly

scheduled international the inauguration of the airport in January 2023.315 The new air route intends to establish direct connectivity between Pokhara and China so that the city can attract foreign tourists without

Kathmandu. The launch of this

tourists from China’s declaration of 2025 as the ‘Visit Nepal Year’ has not materialized. Chinese arrivals to Nepal decreased from a pre-pandemic high of 59,437 between January to April 2019 to 38,290 in 2024 during the same period, and fell even further to 36,954 in 2025.316 Meanwhile, concerns also emerged about potential corruption in the airport’s construction, which was completed under a loan from China. A parliamentary committee in April concluded that NPR 14 billion (USD 102.8 million) was misappropriated

irregularities in the bidding and construction stages.317 In May, the House of Representatives asked the Commission for Investigation of Abuse and Authority (CIAA) to investigate these allegations.318

Outlook

After a slow start to the year, the recovery in tourist arrivals in April 2025 offers a positive signal for Nepal’s tourism sector. Though overall tourist arrivals in the quarter were slightly reduced

return to, and ultimately surpass, pre-COVID levels. The government also took steps to build on past successes and position Nepal as a global center for cultural and spiritual tourism, and will likely place a strong emphasis on Buddhist tourism following strong performances from Lumbini. These efforts aligned with a broader shift towards more targeted, sustainable, and high-quality tourism, seen in the proposed tighter restrictions for Mount Everest climbing permits and a new visa to attract digital nomads. Despite these green shoots, many challenges remain in converting

2025’ has largely failed to materialize, with numbers declining compared to last year. ‘Visit Pokhara Year’ has also been undermined by a corruption scandal around the cost of its construction. Thus, Nepal must improve its governance and ability to implement initiatives to ensure it can leverage its considerable strengths in tourism.

4 Market Review

Financial Market

During the review period, from March 1 to May 31, 2025, Nepal's Balance of Payments (BoP) recorded a surplus of NPR 346.23 billion (USD 2.55 billion), marking a slight decline compared to the same period last year. The review period presented a mixed scenario where, concerns around asset quality, weak credit growth, and governance issues persisted. At the same time, regulatory tightening, liquidity controls, and initiatives shifting policy environment. Factsheet320

Third Quarter Performance Analysis of Commercial Banks321

As per the unaudited thirdquarter results of commercial banks for FY 2024/25 AD (2081/82

by 4.71% compared to the same period in previous FY 2023/24 AD (2080/81 BS).

In the third quarter of FY 2024/25 AD (2081/82 BS), Nabil Bank reported the highest net

36.84 million), followed by Nepal Investment Mega Bank (NIMB) with NPR 4.54 billion (USD 33.12 million) and Global IME Bank with NPR 4.53 billion (USD 33.05 million). Additionally, compared to the same period in the last 2,032.80% at NPR 2.78 billion (USD 20.28 million) and 38.61% at NPR 4.54 billion (USD 33.12 million), respectively. Meanwhile,

NIC Asia Bank recorded the million (USD 1.14 million).

In terms of reserves and surplus, Rastriya Banijya Bank led with NPR 37.40 billion (USD 272.85 million), followed by Nepal Investment Mega Bank (NIMB) at NPR 31.95 billion (USD 233.10 million), and Nabil Bank at NPR 31.32 billion (USD 228.50 million).

In total, eight banks surpassed the reserves and surplus industry average of NPR 17.09 billion (USD 124.68 million).

Overall, according to the nine months’ data of FY 2024/25 AD (2081/82 BS), deposits at commercial banks grew by 11.16%, compared to the corresponding period in FY 2023/24 AD (2080/81 BS). Global IME Bank mobilized the highest deposits worth NPR 517.67 billion (USD 3.78 billion), followed by Nabil Bank with NPR 502.11 billion (USD 3.66 billion) and Rastriya Banijya Bank with NPR 461.21 billion (USD 3.36 billion). Whereas, Standard

Chartered Bank reported the lowest deposits from customers at NPR 122.60 billion (USD 894.43 million). Contrarily, compared to the same period in the previous FY 2023/24 AD (2080/81 BS), Everest Bank recorded the highest deposit growth of 24.17%, reaching NPR 266.44 billion (USD 1.94 billion).

Total credit growth expanded by 7% compared to the same period in FY 2023/24 AD (2080/81 BS).

Global IME Bank held the largest loan portfolio of NPR 413.29 billion (USD 3.02 billion), followed by Nabil Bank at NPR 401.16 billion (USD 2.93 billion) and NIMB at NPR 327.82 billion (USD 2.39 billion). Meanwhile, Standard Chartered Bank had the lowest credit disbursement of NPR 77.26 billion (USD 563.65 million).

Lastly, the average NonPerforming Loan (NPL) ratio of commercial banks rose to 4.83% from 3.65% in the same period last FY 2023/24 AD (2080/81 BS), while the average cost of funds declined to 4.60% from 6.60%.

Figure 15. Deposit Mix at Banks and Financial Institutions by mid-October (Percentage Share)

Source: Current Macroeconomic and Financial Situation based on nine months’ data, Nepal Rastra Bank, FY 2024/25 AD (2081/82 BS)323

Similarly, in the review period, credit provided to the private sector by BFIs witnessed a rise of 7.1%, compared to the corresponding period last year. This increase contrasts with the nine months’ data of FY 2024/25 AD (2080/81 BS), where credit grew by 4.6%.

Similarly, the average base rate stood at 6.32% during the review period, down from 6.60% in the same period in FY 2023/24 AD (2080/81 BS). NIC Asia Bank recorded the highest base rate at 7.20%, and Rastriya Banijya Bank had the lowest at 5.02%.

KEY INDICATORS

Some of the key banking sector indicators as per the Current Macroeconomic and Financial Situation report published by NRB are highlighted below. These are based on nine months’ data of FY 2024/25 AD (2081/82 BS) ending in mid-April of 2025 AD.322

Deposit and Credit Mobilization

The deposits at BFIs grew by 5.7% in the review period as compared to 7.2% in the same period in FY 2023/24 AD (2080/81 BS). Among the total number of deposits, demand deposits, saving

accounted for 5.7%, 35.8%, and 51.0% respectively. These proportions have experienced a slight change compared to a year ago when the respective shares were 5.2%, 29.1%, and 58.9%.

Additionally, BFIs witnessed an increase in outstanding loans to various sectors. The industrial production sector witnessed a rise of 9.6%; the construction sector experienced a growth of 11.4%; the wholesaler and retailer sector increased 5.2%; while the transportation, communication, and public sectors observed a

growth of 10.2% in outstanding loans, compared to the nine months’ data of FY 2023/24 AD (2080/81 BS). Moreover, as compared to the same period

to the service industry increased by 8.6%, and consumable sector increased by 8.3%.

Figure 16. Sectorwise Outstanding Credit of Banks and Financial Institutions (Amount in NPR billions)

Source: Current Macroeconomic and Financial Situation based on nine months’ data, Nepal Rastra Bank, FY 2024/25 AD (2081/82 BS)324

Compared to last FY 2023/24 AD (2080/81 BS), trust receipt loans for import witnessed an increase of 60.6%, while margin nature loans increased by 37.8%. Moreover, cash credit loans increased by 5.2%, term loans by 4.9%, real estate loans, including residential personal home loans, by 4.9%, and hire purchase loans by 4.1%. On the other hand, overdraft loans decreased by 12.1%.

Liquidity Management

2024/25 AD (2081/82 BS), NRB absorbed a total liquidity of NPR 17.19 trillion (USD 125.41 billion) on transaction basis. This liquidity absorption consisted of NPR 2.21 trillion (USD 16.12 billion) through the deposit collection auction and NPR 14.97 trillion (USD 109.21 billion) through the Standing Deposit Facility (SDF), whereas the Overnight Liquidity Facility (OLF) of NPR 2.70 billion

(USD 19.70 million) was utilized. In the corresponding period of the previous year, NPR 766.19 billion (USD 5.59 billion) net liquidity was absorbed through various instruments of monetary operations.

Moreover, NRB injected liquidity amounting to NPR 484.71 billion through the net purchase of USD 3.63 billion from the foreign exchange market. In comparison, in the corresponding period of the previous year, a liquidity of NPR 566.55 billion was injected through the net purchase of USD 4.26 billion.

Additionally, NRB purchased Indian currency (INR) equivalent to NPR 386.81 billion through the sale of USD 2.84 billion. Comparatively, in the corresponding period last year, INR equivalent to NPR 366.99 billion was purchased through the sale of USD 2.76 billion.

Foreign Exchange Reserves and Adequacy

According to the nine months’ data of FY 2024/25 AD (2081/82 BS), the total value of foreign exchange reserves rose by 18.9% to NPR 2.43 trillion (USD 17.72 billion) in mid-April 2025, compared to NPR 2.04 trillion (USD 14.88 billion) in mid-July 2024. Moreover, the reserves held by BFIs, excluding the NRB, increased by 50.8% to NPR 290.38 billion (USD 2.12 billion) in mid-April 2025 from NPR 192.55 billion (USD 1.40 billion) in mid-July 2024. Within this, the proportion of Indian currency in the total reserves amounted to 20.4% as of mid-April 2025.

2023/24 AD (2080/81 BS) (Mid-July) FY 2024/25 AD (2081/82 BS) (Mid-April)

Table 5. Foreign Exchange Adequacy Indicators

Source: Current Macroeconomic and Financial Situation based on nine months’ data, Nepal Rastra Bank, 2024/25 AD (2081/82 BS)325

Additionally, based on the imports of nine months of FY 2024/25 AD (2081/82 BS), foreign exchange reserves of the banking sector

cover approximately 17.1 months of prospective merchandise imports and 14.2 months of both merchandise and services imports.

Interest Rates

The weighted average rate for the 91-day treasury bills remained steady at 3.06% as of mid-April 2025 AD, compared to 3.00% in the corresponding month of the

Published on May 25, 2025326

the weighted average interbank transaction rate among commercial banks, which was 3.10% a year ago, decreased to 3.00% as of mid-April 2025.

In the same period, the average base rate of commercial banks experienced a decrease, falling from 8.51% a year ago to 6.29% by mid-April 2025. Furthermore, the weighted average deposit rate and lending rate of commercial banks stood at 4.45% and 8.22% respectively. Comparatively, these rates were 6.53% and 10.55% respectively a year ago.

Balance of Payment (BoP)

According to the nine months’ data of FY 2024/25 AD (2081/82 BS), ending in mid-April 2025 AD, BoP was at a surplus of NPR 346.23 billion (USD 2.55 billion), which witnessed a decrease of 5.18% compared to the corresponding period of the previous year, where the BoP was at a surplus of NPR 365.16 billion (USD 2.75 billion).

Key Highlights from the Third Quarter Review of the Monetary Policy of 5%.

The deposit collection rate under the lower bound of the interest rate corridor is unchanged at 3%, while the bank rate, under the upper bound of the corridor, maintained at 6.5%.

Both the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been kept unchanged.

The risk weight on share-backed loans has been lowered to 100% from 125%, though the current ceiling of NPR 150 million on such loans remains unchanged.

BFIs must now hold a minimum of 90% of their required cash reserves in vaults each day, up from the previous 70% requirement.

NRB will issue standard procedures to certify cheque bounce cases, as per the latest amendment in the Banking Offence and Punishment Act, 2008 AD (2064 BS).

NRB proposed to revise and issue the Foreign Investment and Foreign Loan Management Regulations, 2021, to enhance foreign investment. These regulations will integrate recent amendments from the Foreign Exchange (Regulation) Act, 2019, and the Foreign Investment and Technology Transfer Act, 2019, creating a more investor-friendly regulatory framework.

KEY DEVELOPMENTS

Dr. Biswo Nath Poudel

Appointed as 18th Governor of NRB

On May 20, 2025, Dr. Biswo Nath Poudel was appointed as the 18th Governor of Nepal Rastra Bank (NRB), taking the helm of the central bank at a time when Nepal's economy faces 327 His appointment followed a period of political deliberation and legal proceedings, culminating in a cabinet decision to entrust him with this critical role.328 Previously, Dr. Poudel was part of the initial recommendation committee formed on March 24 to choose the governor of the central bank. After political preparations to pick him as a member, however, he stepped down from the post and was consequently chosen for the role. Dr. Poudel previously

served as Vice Chairman of the National Planning Commission and also contested in generation elections from Chitwan-3 in 2022, representing the Nepali Congress.329 He holds a Ph.D. in Agricultural and Resource Economics from the University of California, Berkeley, and has been involved in various national and international economic initiatives.330 As Governor, Dr. Poudel is expected to address pressing issues such

stability, promoting productive sector lending, and restoring the general public.

Rising NPLs and NBAs Challenge Nepal’s Financial Stability

In the beginning of the previous quarter, NRB released its Annual Bank Supervision Report 2024.331

According to it, Nepal's banking sector grappled with increasing non-performing loans (NPLs) and the accumulation of non-banking

By the end of FY 2023/24 AD (2080/81 BS), the average capital adequacy ratio of commercial banks declined to 12.84% and the primary capital adequacy stood at 10.10%, with some institutions struggling to meet the regulatory thresholds of 10% and 6% for overall and primary capital adequacy, respectively.332 This decline was attributed to deteriorating asset quality and a sluggish lending environment. Despite a reduction in interest rates, private sector lending reportedly remained subdued, growing by only 6% in the last

decade-long average of 18%.333 As per the report, banks were

hesitant to extend credit due to economic uncertainties and the risk of defaults. Consequently, they were accumulating NBAs, primarily unsold collateral from defaulted loans, which further strained their balance sheets.334 Additionally, the central bank highlighted governance issues, including the use of poor-quality collaterals, misuse of loans, and reports, often involving collusion between borrowers and bank 335

NRB Mandates Higher Daily Cash Reserve to Strengthen Liquidity Management

Effective June 1, 2025, NRB mandated that BFIs maintain at least 90% of the required 4% Cash Reserve Ratio (CRR) daily.336 A cash reserve refers to the portion of depositors' funds that BFIs are required to hold as reserves with the central bank. This mechanism

liquidity to meet withdrawal

stability. Previously, the daily requirement was set at 70%. This adjustment aims to enhance liquidity management and ensure that BFIs are better equipped to 337

NBA and IFC Collaborate to Advance Climate Finance in Nepal

On March 25, 2025, the Nepal Bankers’ Association (NBA) and the International Finance Corporation (IFC), a member of the World Bank Group, signed a Memorandum of Understanding (MoU) to enhance climate in Nepal.338 The agreement

aims to support the Nepali banking industry in integrating climate risk considerations

and mobilizing resources for sustainable investments, thereby supporting the integration of Environmental, Social, and Governance (ESG) principles. Under this collaboration, NBA and IFC will focus on key areas such as conducting baseline and market opportunity studies, and facilitating training and workshops for stakeholders to promote climate resilience. The partnership is supported by the European Union's Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (ACSIIS) program which began in 2022.

Surge in Suspicious Transactions Raises Concerns Over Financial Integrity in Nepal

In 2024, Nepal witnessed a

with reports rising from 6,255 in 2023 to 9,304 in 2024, as per the NRB’s Financial Information Unit (FIU).339 These transactions,

Laundering Prevention Act, 2063, were reported by various institutions to the FIU. Out of the 1,894 reports analyzed, 1,086 were forwarded to law enforcement and regulatory bodies for further investigation, while 808 were archived for potential future analysis.340 Additionally, crossborder transaction reports submitted by BFIs increased from 1.78 million in 2023 to 1.97 million in 2024. Further, the number of entities connected to the FIU’s goAML system, a software system developed by

Drugs and Crime (UNODC) to combat money laundering and

1,496 to 1,905 during the same period. This surge in suspicious transactions underscores the need for enhanced vigilance and robust anti-money laundering system.341

Budget of NPR 1.96 trillion (USD 14.30 billion) Announced for FY 2025/26 AD (2082/83 BS)

For FY 2025/26 AD (2082/83 BS), a budget of NPR 1.96 trillion (USD 14.30 billion) was announced on May 29, 2025.342 From this amount, a total of NPR 1.18 trillion (USD 8.61 billion) and NPR 407.89 billion (USD 2.98 billion) will be used for recurrent and capital expenses respectively. Additionally, NPR 375.24 billion (USD 2.74 billion) was allocated

includes the strategic handling of government funds, including debt management, investments,

effective use of resources to meet the country's economic goals.

Major Highlights of FY 2025/26 AD (2082/83 BS) Fiscal Budget for the Financial Market343

2025/26 AD (2082/83 BS).

A dedicated Asset Management Company (AMC) will be established to manage NPLs and utilize underused assets in both banking and public sectors.

support the rural economy.

VAT on digital payments and clearing house services was removed to promote digital transactions. telecommunications, and securities.

sectors will be promoted. All public sector payments will be linked to the electronic system.

A centralized, annual KYC update system will be introduced, integrated with the National ID and accessible electronically.

Outlook

Governor offers a welcome reset, structural weaknesses in the banking sector continue to deepen. The rise in non-performing loans (NPLs) and non-banking assets suggests that years of unchecked lending and weak oversight are now materializing into systemic risk. What is equally concerning is governance. Meanwhile, the new Cash Reserve Ration (CRR) mandate signals NRB’s intent to

IFC collaboration shows that parts of the sector are thinking long-term. Despite this, for now, culture, liquidity tweaks and partnerships alone won’t be enough to restore market dynamism.

Capital Market

During the review period, from March 1, 2025, to May 31, 2025, the secondary market registered a decline of 6.82%, a reversal from the 2.81% gain seen in the previous quarter. Throughout this period, the Nepal Stock Exchange (NEPSE) index continued its downward trajectory, dipping to 2,582.73 points on March 25, 2025, before modestly recovering to close at 2,693.06 points by

Early in the quarter, optimism surrounding a wave of Initial Public Offering (IPO) approvals and anticipated reforms temporarily uplifted investor sentiment. However, progress stalled as Securities Board of Nepal’s (SEBON’s) newly introduced directives triggered regulatory delays, prompting increased caution among market participants. Consequently, the early recovery lost steam, highlighting the market’s vulnerability to shifting regulatory developments and evolving regulatory landscapes.

Secondary Market

During the review period, from March 2, 2025, to May 28, 2025, the NEPSE index closed

fall of 197.22 points (6.82%) with a peak on March 2, 2025, at 2890.28 points. Within this, the total market capitalization at the end of the review period was NPR 4.48 trillion (USD 32.68 billion).349 Among the main indices, the Sensitive index fell by 4.77% to

461.20 points, and the Float Index dropped by 5.99% to 184.13 points. In the sub-indices, the Banking sub-index declined by (3.23%), Development Banking sub-index by (6.45%), Finance sub-index by by (9.62%), Hydropower subindex by (10.88%), Hotels and Tourism sub-index by (4.01%), Manufacturing and Processing sub-index by (6.86%), Life Insurance sub-index by (9.32%),

Non-Life Insurance sub-index by (7.36%), Mutual Funds subindex by (4.30%), Investment sub-index by (6.10%), and Others sub-index by (6.74%). Only the Trading sub-index edged up by 0.14% to 4,345.31 points. Figure 17 shows the daily changes of the NEPSE index during the review period.

Figure 17. NEPSE Movement from March 2 to May 25, 2025

Source: Nepal Stock Exchange (NEPSE)348

KEY DEVELOPMENTS

NRB Lowers Risk Weight on Share-Backed Loans to Stimulate Credit Flow

In a strategic move to invigorate

Rastra Bank (NRB) reduced the risk weight for share mortgage

loans from 125% to 100%.350 In other words, the NRB allowed (BFIs) to keep aside less extra money when it gives a loan against shares as collaterals. This adjustment, announced in the third-quarter review of the Monetary Policy for FY 2024/25

AD (2081/82 BS), released on May 25, 2025, aims to encourage BFIs to extend more credit against share collateral, thereby enhancing liquidity in the capital market. Despite this policy shift, however, the NEPSE index experienced a marginal decline of 5.21 points on the day of the

announcement, indicating a cautious market response.351 The reduction in risk weight is anticipated to lower the capital requirement for banks, potentially leading to increased lending activities. This move is part of NRB's broader strategy to stimulate economic growth by making credit more accessible, especially in sectors like real estate and automotive, which have also seen similar risk weight adjustments in recent policy reviews.352

Nepal Authorizes Citizens to Receive Sweat Equity in Foreign Firms

Government of Nepal, through AD (2082/83 BS), announced that Nepali citizens will be permitted to receive 'sweat shares' in foreign companies.353 This initiative allows individuals to gain shares, also known as sweat equity, in exchange for non-monetary expertise or services to foreign enterprises. By enabling Nepalis to acquire such shares, the government aims to recognize and reward the intellectual and technical contributions of Nepalis in the global market while encouraging greater participation in international ventures.354 This policy is part of broader efforts to modernize Nepal's investment landscape and align with global practices. It complements recent legal reforms that allow startups to issue up to 40% of their equity as sweat shares to contributors of ideas, intellectual property, and technical know-how.355

NEPSE Introduces 15-Minute Weighted Average Rule to Curb Market Manipulation

In the review period, NEPSE implemented a new pricing mechanism aimed at enhancing market transparency and preventing price manipulation. Effective from March 20, 2025, the closing price of listed securities will now be determined by the weighted average of

15 minutes of the trading session,

3:00 PM.356 This closing price will serve as the opening price for the next trading day. In cases where no trades occur during the

last traded price will continue to be used as the opening price for the following day.357 Previously, the closing price was based solely on the last transaction of the day, a system susceptible to manipulation by investors executing low-volume trades at

market closed.358 The new rule, established under the fourth amendment to the Securities Transaction Bylaws 2025, aims to mitigate such practices by factoring in both the price and volume of trades during the designated time frame.

CIAA Investigates SEBON Over Alleged IPO Irregularities

The Commission for the Investigation of Abuse of Authority (CIAA) launched an investigation into SEBON concerning alleged misconduct in the approval process of Initial Public Offerings

conducted a raid on SEBON's

related to 89 companies awaiting IPO approval.359 This action follows accusations, particularly from hydropower developers,

commissions of up to 5% of the IPO issuance amount in exchange for approval.360 The CIAA's intervention has brought to light concerns about transparency and accountability within Nepal's capital market regulatory framework. With over three dozen hydropower companies currently in the pipeline for IPO approval, the investigation could lead to delays in their public offerings. The outcome of this probe may prompt a reevaluation of SEBON's internal processes and potentially result in reforms aimed at bolstering investor practices in the capital market.361

SEBON Rejects IPO Applications of 14 Companies

Through an announcement made on May 20, 2025, SEBON rejected the Initial Public Offering (IPO) applications of 14 companies due to a failure to meet the regulatory criteria.362 13 of the 14 companies, operating across various sectors such as hydropower, tourism, media, pharmaceuticals, and aviation, had allegedly not conducted proper asset revaluations and thus fell short of the minimum

(USD 0.66) net worth per share.363 Meanwhile, the 14th company –a hydropower company – had a Power Purchase Agreement

increasing investor risk. This regulatory move follows directives aimed at enhancing investor protection and ensuring that are allowed to raise funds from the public. SEBON emphasized that the decision was made on technical grounds and urged the capital base before reapplying. In parallel, SEBON continued to IPO applications from various industries with proposals totaling over NPR 52 billion (USD 379.35 million) under evaluation.364

Government of Nepal Announces Plans to Restructure SEBON Board

On May 23, 2025, as part of an action plan to implement the recommendations of the High-Level Economic Reforms Advisory Commission, the Government of Nepal announced plans to restructure SEBON within a year by amending the Securities Act. The proposed bill would include provisions to restructure board representation in line with international best practices.365 Under the proposed changes, the Revenue Secretary from the Ministry of Finance

and the Deputy Governor from NRB will be appointed as new board members. At the same time, current representatives from the Ministry of Law and the private sector, including those from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), will be replaced with other experts.366 The restructuring aims to bring specialized expertise to the board, thereby strengthening its regulatory capacity and ensuring more effective oversight of Nepal's capital markets.367

A secondary market trading of government bonds will be introduced to enhance liquidity and deepen the country’s capital markets.

Non-Resident Nepalis (NRNs) will be permitted to participate in the secondary market to foster capital market growth.

Foreign companies registered in Nepal will be allowed to issue sweat equity.

NEPSE will undergo comprehensive restructuring.

In line with Green Taxonomy principles, policies and frameworks will be established to mobilize private investment through green and sustainable development bonds. Capital will be raised from the international markets by issuing local currency-linked bonds.

Investment companies and other institutional investors listed on NEPSE will be enabled to invest in equities, bonds, and national priority-sector securities. Legal provisions will be made to allow the Employees Provident Fund, Citizens Investment Fund, and Social Security Fund to invest in Private Equity and Venture Capital.

Regulatory measures will be introduced to permit hedging services, helping to attract foreign investment by managing foreign exchange risk.

Major Highlights of FY 2025/26 AD (2082/83 BS) Fiscal Budget for the Capital Market368

Outlook

Nepal’s capital market is entering a phase of structural maturity, marked by institutional reforms and a shift toward proactive regulation. The central bank’s reduction of risk weights on sharebacked loans may modestly boost liquidity, while SEBON’s stricter IPO scrutiny and upcoming board overhaul signal a stronger emphasis on market integrity. Additionally, the government’s integration. Meanwhile, NEPSE’s new closing price rule could enhance price discovery and curb manipulation, reinforcing investor trust. However, allegations against SEBON of bribery and developments such as the CIAA’s raid on SEBON over alleged irregularities in IPO approvals have cast a shadow over regulatory credibility, raising concerns about transparency and governance. Though immediate market activity may remain subdued, these developments lay the groundwork for disciplined growth, healthier consolidation, and a more resilient capital market in the days ahead.

Introduction

by former Finance Secretary, Rameshore Khanal, and including experts from academia, think tanks, and the private sector. The Commission’s objective was to suggest reforms to the government as a response to the economic slowdown in Nepal. Within the deadline of six months, by April 2025, the Commission created a 447-page report detailing 408 reform actions designed to redirect Nepal's economic structure from remittance-driven consumption toward a productivity-based investment economy. The report is a rationalization, business climate improvement, infrastructure modernization, and public sector governance enhancement.

history, the government not only made the report public within minutes of submission but also established a three-member Secretary-level task force to develop a time-bound action plan. In a country where such reports are usually shelved and gather dust, this demonstrated genuine political will for systemic change.

Ministers made a historic decision by approving an action plan to implement the recommendations of the High-Level Economic Reforms Commission.

The urgency behind these reforms stems from Nepal's economic challenges following a brief post-COVID recovery. After achieving 4.84% GDP growth in FY 2021/22 AD (2078/79 BS), the economy entered a prolonged low-growth phase as external sector pressures mounted, creating the political space for the government to respond to private sector demands for comprehensive economic reforms. Today, Nepal faces critical structural challenges rooted in its incomplete economic transformation from an "agriculture-based subsistence economy" to a "remittance-based consumption economy," with remittances consistently

markets, persistent government expenditure imbalances, and a weak industrial base, while the country's abundant natural resources - from its estimated 43,000 MW hydropower potential to its rich biodiversity - remain underutilized due to conservative management approaches and institutional bottlenecks.

In the background of these important developments, the special section for this edition of the NEFport, titled “Reforms 2.0,” examines Nepal's reform journey through three distinct yet interconnected perspectives. The three articles explore how the High-Level Economic Reforms Commission was formed, what it accomplished, and what will it take to turn its recommendations into reality:

• 'The Idea of Economic Reforms' by Rameshore Khanal (Chairperson, High-Level Economic Reforms

• 'Reforms 2.0: Implementing Sustainable Natural Resource Use in Nepal' by Dr. Menuka Karki (Policy Researcher, High-Level Economic Reforms Commission) explores strategies for sustainable natural resource utilization as a cornerstone of economic transformation.

• 'Reform 2.0: Issues of Nepal's Structural Economic Transformation' by Dr. Pradeep Panthi (Research Fellow, Policy Research Institute) examines the structural challenges that must be addressed to achieve meaningful economic transformation.

Overall, these articles collectively underscore the idea that Nepal’s economic transformation has been shaped more by survival than strategy but the Reforms 2.0 initiative offers an opportunity to reset this trajectory. What Nepal needs is the ability to create deep, systemic changes that address internal structural challenges with vision, coherence, and determination.

The Idea of Economic Reforms

Chairperson, High-Level Economic Reforms Commission

On May 19, 2025, the Council of Ministers approved an action plan to implement the recommendations made by the High-Level Economic Reforms Commission. This decision Commission submitted its government has rarely created a time-bound action plan to follow up on the recommendations from various commissions or similar bodies. This indicates the current government’s commitment to pursuing reforms even in challenging circumstances.

Many people had speculated that the report would be ignored, as has often been the case in the past. However, contrary to this belief, the Ministry of Finance made the report public within minutes of submission. Additionally, the Council of Ministers also formed a threemember Secretary-level task force within a week to develop a time-bound action plan. How did this come about?

The COVID-19 pandemic severely affected many economies, but Nepal’s recovery was notably rapid, almost achieving a V-shaped rebound. The GDP growth rate for the Fiscal Year 2021/22 AD (2077/78 BS) rose to 4.84% after contracting by 2.37% in the previous year. Unfortunately,

this momentum did not last.

Starting in FY 2022/23 AD

began emerging in the external sector. Both the government and the monetary authority took drastic steps, some of which were in the external sector. Although these actions improved the foreign exchange reserves, the resulting tight credit and import restrictions created a negative effect on the aggregate demand. As a result, the economy entered a prolonged low-growth phase lasting for over a year.

In this context, the business community began advocating for major economic reforms. As the economic slowdown impacted government revenues, the government responded to the demands of the private sectors’.

In the FY 2024/25 AD (2080/81

announced the formation of a high-level economic reforms advisory commission. Although the coalition government collapsed and a new government minister remained eager to receive proposals for critical economic reforms.

On October 2, 2024, I received a call from the Finance Minister’s secretariat, which was then immediately transferred to the

Minister as soon as I answered. Upon greeting the minister, he requested a meeting to discuss the terms of reference and the formation of the high-level economic reforms commission. Since the next day was a holiday, I proposed a meeting on the 4th During our meeting, the minister presented me with a 10-page document outlining the terms of reference for the proposed commission. He wanted me to review it and provide feedback. I asked for a few days to assess the implications of past reforms, the underlying constraints of the economy, and expectations regarding reforms. However, before I could come up with a revised Terms of Reference, I received a call from the minister on the morning of the 7th indicating the cabinet’s decision on the formation of the commission. He read me the names of members and informed me that I would be chairing the commission. I sensed the urgency in his voice.

The Commission’s work began two weeks after the cabinet’s decision due to the Dashain holidays. We held several meetings with the minister to clarify the government’s expectations from the commission and its willingness to embrace reforms. This was crucial because several important

recommendations from previous commissions regarding public tax reforms and cooperative sector reforms had not been implemented, leading to a general perception that the government merely formed the commission without taking action. The the government was committed to reforms.

All the members of the commission, including representatives from the private sector, had extensive experience and expertise in Nepal’s economy and business environment, making it easier for us to reach a consensus on the causes of the economic slowdown and approaches to harness growth opportunities in sectors where Nepal had competitive advantages. Our

initial priority was to examine the reasons behind the ongoing economic decline and identify measures that could instill some optimism in the market. While analytical work was vital, it was equally important to consult with the business community across various sectors and geographical regions, as well as with federal and subnational government

To manage this effectively, we divided responsibilities among themes while contributing to the overall report writing. Field visits were planned to cover all ecological regions and focus group meetings were conducted with various community members.

Given the government’s urgency, the commission produced and submitted an interim report

that recommended measures to boost aggregate demand and improve the investment climate. Some of these recommendations were implemented by the government almost immediately.

prior to the six-month deadline. It includes not only recommendations for demandside policy but also structural reforms on the supply side. The report emphasizes the importance of building a system founded on trust. It argues

innovation and makes businesses more risk-averse. Furthermore, too much control can lead to rent-seeking and corruption, ultimately increasing the cost of doing business. The report urges the government to reconsider some long-held beliefs regarding exchange rate stability.

Introduction

Reforms 2.0: Implementing Sustainable Natural Resource Use in Nepal

Policy Researcher, High-Level Economic Reforms Commission

Nepal’s High-Level Reforms Committee has proposed recommendations aimed at enhancing sustainable economic growth through effective management of natural resources. This initiative aligns with Part 4 of the 2015 Constitution, which emphasizes the protection, promotion, and sustainable use of water, forest, land, and minerals. This article outlines strategies to implement these recommendations, focusing on leveraging incentives, evidenceinformed policymaking, interministerial coordination, and transforming challenges into opportunities.

Shifting from Conservation to Sustainable Use

Nepal’s approach to natural resource management has

a conservative mindset that emerged after the 1990s, largely as a response to deforestation. This perspective often links forest usage with poor governance, which hinders a country's economic growth. To align with the objective set forth by the High-Level Reforms Committee, Nepal must transition towards sustainable use of natural resources, especially by

Management (SFM) over 1.18 million hectares. This strategy employs targeted silviculture techniques to strike a balance among economic, social, and environmental goals. Embracing this shift could foster economic development while addressing pressing environmental challenges.

Implementation Strategies

1. Leveraging Economic Incentives

Economic theory highlights that individuals respond positively to incentives. Therefore, it is crucial for policies to incentivize sustainable practices, especially within the private sector. A notable example is the Bhimsen Thapa Rural Municipality in Gorkha, which encourages locals to collect leaf litter by offering them NPR 2 per kg. This initiative

but also reduces greenhouse gas emissions while creating economic opportunities for the community.

Additionally, the Ministry of Forests and Environment (MoFE) has an opportunity to increase its contribution to the national economy as agriculture, forestry

GDP in FY 2023/24 AD (2079/80

BS) and the contribution of forest only is small. By implementing the System of EnvironmentalEconomic Accounting (SEEA), MoFE can quantify and communicate the economic value of sustainable practices. Moreover, providing incentives to MoFE and its personnel economic impact of the forestry sector.

2. Evidence-Informed Policymaking

Evidence-based policymaking is critical for effective project implementation. By documenting lessons learnt, successes, and challenges from various initiatives lead to valuable knowledge generation. In Nepal, the Government of Nepal’s committee for reform utilizes contextual evidence to design complementary policies across different sectors. Strengthening knowledge management within MoFE and other ministries enables insights from initiatives, programs, to inform future policies, enhancing both

3. Aligning Policies, Budgets, and Ministries

To implement policies effectively, it is important to align them

with budgets and roles of various ministries. For instance, agroforestry coordinates the efforts of the Ministry of Agriculture and Livestock Development (MoALD) for agricultural inputs, MoFE for forest management, and the Ministry of Industry, Commerce, and Supplies (MoICS) for market value chains. The Ministry of Finance (MOF) aligns the budgets, while the Ministry of Women, Children, and Senior Citizens (MoWCSC) addresses the needs of marginalized groups. This coordinated approach generates a multiplier effect, enhancing outcomes such as the 5.7% GDP contribution from livestock in FY 2023/24 AD (2079/80 BS).

4. Transforming Challenges into Opportunities

Converting obstacles into resources is key. For example,

contribute to pollution, as seen in the high emissions in the Kathmandu Valley. However, we can repurpose leaf litter for composting and decaying trees for paper production, thus creating economic value. Local governments can encourage composting initiatives that provide fodder and fertilizers, supporting livestock. Furthermore, Nepal’s abundant water resources provide a comparative advantage in hydroelectricity, which can reduce reliance on imported petroleum which is a major facilitating carbon trading.

5. Capitalizing on Comparative Advantages

Nepal’s unique geography and biodiversity present opportunities for non-timber forest products (NTFPs). Processing, packaging, and certifying NTFPs, while utilizing cooperatives to manage market linkages allows farmers to focus on production. This aligns with Adam Smith’s theory of specialization to

can be tapped into economic opportunity shifting additional focus on the production of exportable goods, such as cheese, through investments in

Moreover, increasing hydroelectricity production can associated with petroleum imports, while maximizing economic and environmental

Policy Context and Challenges

Part 4 of Nepal’s Constitution emphasizes the importance of sustainable resource use. natural resources encompass. Generally, natural resources include elements like water, forests, land, and minerals. Current challenges include low economic contributions from sectors like mining contributing merely 0.47% of GDP in FY 2023/24 AD (2079/80 BS) and a conservative mindset limiting use of forest resources. Overcoming these challenges will require collaborative efforts among

and development actors to maximize resource potential.

Opportunities for Economic Growth

Nepal’s forest products can outcomes and support livestock and composting initiatives. Cultivating trees on private land, as suggested by Finnish counterparts highlighting Nepal’s faster tree growth, can leverage these comparative advantages. Developing green enterprises through collaborations between the public and private sectors can enhance economic contributions from NTFPs and clean energy, aligning with global sustainability goals.

Recommendations

• Promote Incentives: Expand initiatives like Bhimsen Thapa municipality’s leaf litter project and implement

to balance economic and environmental goals.

• Strengthen Evidence Systems: Improve knowledge documentation within MoFE to guide policy development.

• Enhance Coordination: Align the efforts of MOALD, MoFE, MOICS, MOF, and MoWCSC for programs like agroforestry.

• Convert Waste to Resources: Repurpose forest waste for paper or compost and utilize water resources for hydroelectric power.

• Support Green Enterprises:

NTFP and market linkages to promote specialization while

Conclusion

Successfully implementing Reforms 2.0 requires leveraging incentives, evidence-based,

inter-ministerial coordination, and resource transformation. By harnessing Nepal’s comparative advantages, these strategies can unlock the economic potential of the natural resources, contributing to sustainable commitments. Collaborative

efforts across sectors will ensure effective implementation, driving economic growth and environmental sustainability.

Reform 2.0: Issues of Nepal’s Structural Economic Transformation

I. Introduction: Nepal’s Evolving Economic Structure

As of 2023, Nepal’s economy is mainly focused on services, which account for about 56% of the country’s GDP. Agriculture contributes 21% while industry makes up only 12% (Figure 18). As Nepal is highly reliant on external economic development, with consistently exceeding 25% of GDP (Figure 22), the country is experiencing a structural shift from an “agriculture-based subsistence economy” to a “remittance-based consumption economy”. 369 However, about 4.13 million households (roughly 62% of all households) are engaged in agriculture-related activities.370 This highlights the persistent dominance of low-productivity employment in rural areas and the limited transformation of the agricultural sector. This duality between a service-dominated GDP structure and agricultureNepal’s incomplete and uneven structural transformation.

If we look at structural breaks of key macroeconomic indicators of Nepal, considering the period

after economic reform and liberalization of the mid-1980s to the outbreak of COVID-19, a series of persistent disruptions challenged Nepal’s economic trajectory. Major economic disruptions took place between 2000 and 2003, when the and the royal massacre took place. These challenges emerged in the aftermath of liberalization policies introduced in the mid1980s and were worsened by (1996–2006) and prolonged political transitions. During this time, a growing disparity emerged between regular government spending and investments in infrastructure.

low investor participation, and weak institutional depth. This

system that is expanding in size and inclusiveness.

According to the classical developmental theory, countries normally transition from agriculture to industry and then to services.371 However, Nepal

growth, with workers moving directly from agriculture to foreign employment or in the domestic service sector. Nepal’s shift from agriculture to services without

investment capacity in terms of capital expenditure

expanded in terms of access it remains constrained by and poor intermediation quality. The banking sector

intermediation, but capital market development has been slow, with limited product offerings,

industrialization.372 This type of premature de-industrialization, combined with ongoing political instability, has obstructed the necessary economic changes for consistent long-term growth. Figure 18 illustrates the evolving sectoral composition of Nepal’s economy as of 2023.

Source: World Development Indicators, World Bank

The current challenge lies in redirecting the economic structure away from remittancedriven consumption toward a productivity-based investment economy by expanding the industrial base and a highvalue service sector. Reform 2.0 must serve as a comprehensive agenda to address these underlying issues, which are

2. Structural Reform Issues

2.1. Narrow and Volatile Tax Base

The tax system of Nepal is heavily reliant on indirect taxes, VAT, excise duties, and customs tariffs. While average annual tax revenue relative to GDP for the period of 2017 to 2021 ranks Nepal 11th among 53 low and lower-middleincome countries (Figure 19), the structure remains regressive and vulnerable to external

shocks such as climate disasters or remittance disruptions. Widespread informality and low trust in institutions constrain tax capacity in many developing countries, including Nepal.373 Moreover, the dominance of the informal economy, limited tax compliance, and low trust in public institutions further 374

Figure 19 shows the country’s relatively high tax revenue relative to GDP effort compared to its peers. However, reliance on indirect taxation can widen inequality and undermine the progressivity of the tax system. To improve taxation, it is important to broaden the tax base through digitization, targeting the informal and digital economy, simplifying tax structures, and enhancing public trust through transparent service delivery.

2.2. Underdeveloped Financial Market vs Over-Financing

primarily bank-based, and domestic credit to the private sector is almost 90% of GDP in recent years (Figure 20, Left development index remains low (Figure 20, Right Side), indicating infrastructure and shallow capital the credit is directed towards real estate and non-tradable assets, which fuels asset bubbles and reinforces wealth inequality. Small and Medium-sized Enterprises (SMEs), startups, and productive ventures often face a shortage of credit.

Figure 20 ranks the top 20 out of 68 low and lower-middle-income economies listed in World Development Indicators (WDIs)

Figure 18. Structure of the Nepali Economy

Figure 19. Tax Revenue (% of GDP): Average 2017-2021

Source: World Development Indicators, World Bank

of the World Bank, where Nepal holds the 4th highest position in terms of the average domestic credit to private sector ratio to GDP for the period of 2018 to 2022. In contrast, Nepal ranks 5th lowest among these same 20 economies in the overall Financial Development Index developed by the International Monetary Fund (IMF) for the period of 2017 to 2021, which measures the disparity between Nepal’s high

and its low score on the IMF’s Financial Development Index

the underdevelopment of the capital market. Nepal’s capital market remains small and lacks depth, with limited listings and low sectoral representation. The absence of a well-functioning corporate bond market, a minimal yet fragile investor base, and a instruments hinder effective capital mobilization. Additionally, institutional and regulatory limitations restrict innovation

resulting in an overreliance on the banking sector and a lack of

system. To address these issues, reforms should focus on intermediation, deepening capital instruments such as government and green bonds, and expanding credit access to productive sectors. Economic growth and for the development of the

2.3. Imbalance in Government Expenditure

A structural imbalance exists between capital and recurrent expenditure. While capital budgets are underutilized, recurrent expenditures like wages, pensions, and subsidies consume a disproportionate share of resources. Federalism has

compounded this issue through bureaucratic duplication. Figure 21 demonstrates how recurrent spending outpaces capital investment. Weak procurement systems, poor project design, and low absorptive capacity hinder development outcomes. Slow performance and limited size of the private sector have created

spaces for over-reliance on the public towards public sectors, that have increased the size of government through recurrent expenditures. Nepal must adopt performance-based budgeting, control administrative overheads, and build institutional capacity, especially at the subnational level.

Source: Author’s compilation from NRB Reports

Source: World Development Indicators, World Bank & IMF Financial Development Database
Figure 20. Domestic Credit to Private Sectors (% of GDP) vs Financial Development Index
Figure 21. Share of Recurrent and Capital Expenditure

Infrastructure Project Delivery

Despite having budget allocations,

in infrastructure delivery due to problems with land acquisition issues, weak contract management, and low technical capacity. Weak procurement systems and poor public investment management reduce 375

increased business costs and limit connectivity and access to rural areas. To address these issues, reforms should focus on strengthening public investment management, ensuring transparent procurement practices, enabling one-stop clearances for major projects, and promoting public-private partnerships. Prioritizing infrastructure development is essential for improving productivity and attracting private investment.

2.5. Weak Industrial and Export Base

Nepal is currently facing from a weak industrial base. This situation is exacerbated by high production costs, policy uncertainty, and limited market access. The deindustrialization that occurred during the civil war from 1996 to 2006, coupled with a prolonged political transition until the adoption of the new constitution in 2015, has led to reliance on remittances for consumption and ongoing trade

and export promotion. Key investments in Special Economic Zones (SEZs), industrial clusters, and Research & Development (R&D) are essential. Additionally, reducing labor and logistics costs is critical for rebuilding a competitive industrial base. The private sector needs to build

to effectively promote import substitutions and export growth, ultimately transforming the overall economy.

2.6. Labor Market Rigidity, Outmigration, and Remittance Dependency

Nepal’s labor market is marked by rigidity, informality, and a young individuals entering the workforce lack employable skills, and there is limited creation of formal jobs. As a result, millions of Nepalis seek work abroad, leading to a dynamic labor force beyond national borders. Consequently, remittances account for nearly 25% of GDP on average in recent years. Figure 22 ranks Nepal 6th among 120 low and lower-middle-income economies regarding the average

services, and support the reintegration of returnees. A robust industrial expansion, coupled with the development of a competitive and wellequipped private sector engaged in domestic production and merchandise trade, is essential for creating large-scale employment opportunities and reducing Nepal’s overdependence on foreign labor markets.

Nepal has harnessed only 2,800 MW of its estimated hydropower potential of 43,000 MW, technically and economically.376 As a result, power generation often exceeds the grid capacity, leading to seasonal energy waste. The sector faces challenges such as transmission bottlenecks, regulatory delays, and weak investment planning. To address these issues, a robust national energy strategy is essential. This strategy should connect power generation with industrial demand, improve transmission infrastructure, and encourage cross-border electricity trade. Additionally, integrating private sector investment and fostering regional cooperation is crucial for the sector’s development.

To revitalize the economy, it is crucial to shift policy focus toward import substitution

for the period of 2018 to 2022. While remittances contribute to poverty reduction, they also highlight failure in domestic job creation and create a longterm dependency on foreign employment. Heavy reliance on remittances has shaped the consumption-driven growth in many South Asian economies, including Nepal, with long-term structural implications. To tackle these challenges, reforms are essential to strengthen technical education, enhance employment

2.8. Governance, Corruption, and Regulatory Burdens

Governance remains Nepal’s most pervasive structural challenge. Weak institutional capacity, politicized bureaucracy, and systemic corruption collectively undermine effective service delivery, deter private investment, and erode public trust in state institutions. Figure 23 illustrates Nepal’s performance across six governance indicators from the

(% of GDP): Average 2017-2021

World Governance Indicators (WGIs). Although political stability and civic freedoms, such as freedom of expression and electoral participation, have improved since the end of the

in other critical areas, including the rule of law, corruption control, and regulatory quality. These persistent governance

weaknesses create uncertainty, reduce policy credibility, and

sector dynamism. Improved governance and institutional quality are fundamental to enhancing macroeconomic resilience and achieving sustained long-term growth.377 For Nepal, building an accountable, transparent, and capable state is not merely an administrative

necessity but a development imperative. Effective reform requires enhancing civil service professionalism, enforcing anti-corruption legislation, and embracing digital governance tools. Coordinated efforts across federal, provincial, and local levels are essential to ensure policy coherence and institutional effectiveness.

Figure 19. Tax Revenue
Source: World Development Indicators, World Bank

Source: World Governance Indicators, World Bank

3. Reform 2.0 Agenda and Way Forward

In 2024, Nepal’s High-Level Economic Reform Advisory Commission unveiled a 447page report detailing 408 reform actions. This Reform 2.0 blueprint energy, infrastructure, and public sector governance.

Key highlights include:

• Finance: Narrow interest corridors, issue infrastructure bonds, develop credit information systems, and enhance cooperative regulation.

• Fiscal Policy: Rationalize expenditure, shift from indirect to direct taxation, and improve budget transparency.

• Infrastructure: Improve capital budget execution and expand cross-border electricity infrastructure.

• Public Sector: Restructure underperforming SOEs, professionalize state enterprises, and rationalize public assets.

• Social Security: Raise senior sustainability.

These measures are not just a resilient, competitive, and inclusive economy. Successful implementation hinges on sustained political commitment, public accountability, and strong institutions. However, these measures alone are not enough

• Business Climate: Implement single-window systems, reduce compliance burdens, and promote FDI through legal reforms.

to address the structural issues earlier.

4. Conclusion

Nepal’s economic transformation has been shaped more by survival than strategy. The opportunity offered by Reform 2.0 is to reset this trajectory through deep, systemic reforms. Addressing structural issues in taxation, governance is crucial for building a more productive and equitable economy. To strengthen its institutions, Nepal must commit to reforming both policies and their implementation. The future of Nepal’s economy relies not only on external factors but also on the country’s commitment to addressing its internal structural challenges with vision, coherence, and determination.

Learn more about other work produced by Nepal Economic Forum

NEF’s publication, ‘Introspecting Change’ probes into Nepal’s socioeconomic journey from 2006 to 2021 – of what has been achieved and what is yet to be achieved. The publication presents a wealth of data spanning over a decade, covering diverse sectors such as tourism, agriculture, energy, and more.

Click here to get the report.

The Nefsearch titled, “Dissecting Nepal’s Trade: Trends, Challenges, and Future Potentials” analyzes the trends of trade in Nepal along with its future prospects.This Nefsearch has been authored by Pooja Suwal, Pratisha Lakhey and Sagar Jung Karki.

Click here to read the report.

Marking 10 years since the devastating 2015 earthquake in Nepal, NEFport 60, titled 'Recovering from Disaster: A Decade Since the Gorkha Earthquake' examines the impact of the earthquake and the subsequent steps taken to recover from it. This issue takes into account news updates from December 1, 2024 to February 28, 2025.

Click here to read the report.

NEF has launched its Economic Dashboard - NEFData! It covers three sectors with a vast array of economic data. Additionally, capital and recurrent expenditure for defense.

Click here to start exploring.

"NEFmeet 2024, ‘Towards Connected Economy’ concluded on November 11 with experts discussing the current scenario and prospects of an increasingly interdependent world.

Click here to watch the event.

Himalayan Future Forum 2024, held on February 16th and 17th, marked the launch of HFF's

speakers, and 25 youth fellows, the Forum offered a diverse program including keynote speeches, panel discussions, conversations, and presentations.

Clike here HFF or here to watch the videos of the event.

Support Us

Since its inception in 2009, Nepal Economic Forum has been producing free, accessible and informative evidence-based research to rede-

past 15 years, we have published 57 Nefports, 225+ Neftakes, 15+ Nefsearches and multiple annual publications.

Our work has earned us recognition as one of the top 100 think tanks in Southeast Asia and to a US 501c charity.

Help us continue this private sector-led premium research work on Nepal by Nepalis. Your support would help us achieve even more in the years ahead.

To learn more, do visit our website here

Endnotes

1 “Democracy Index,” Our World in Data, 2024, https://ourworldindata org/grapher/democracy-indexeiu?tab=chart&country=~NPL

2 “Nepal: Freedom in the World 2024 Country Report,” Freedom House, n.d., https://freedomhouse org/country/nepal/ freedom-world/2024

3 “Nepal | RSF,” Rsf.org, n.d., https://rsf org/en/country/ nepal.

4 The Heritage Foundation, “Index of Economic Freedom: All Country Scores,” The Heritage Foundation, February 2025, https://www heritage org/index/pages/allcountry-scores https://www heritage org/index/pages/allcountry-scores

5 The Fund for Peace, “Fragile States Index,” Fragilestatesindex.org, 2024, https://fragilestatesindex org/ country-data/.

6 “2024 Corruption Perceptions Index - Explore Nepal’s Results,” Transparency.org, February 11, 2025, https://www transparency org/en/cpi/2024/index/npl

7 Gopal Sharma, "Nepal Investigates Deadly Violence in Pro-Monarchy Rally", Reuters, March 29, 2025, https://www reuters com/world/asia- /nepal-investigates-deadlyviolence-pro-monarchy-rally-2025-03-29/

8 Biken K Dawadi, "Chaos in Kathmandu: Pro-Monarchy Groups Unleash Arson, Vandalism and Looting", My Republica, August 8, 2024, https://www myrepublica nagariknetwork com/news/parts-of-capital-turn-chaotic-as-pro-monarchygroups-unleash-arson-vandalis-77-11 html

9 Gopal Sharma, "Nepal Investigates Deadly Violence in Pro-Monarchy Rally", Reuters, March 29, 2025, https://www reuters com/world/asia- /nepal-investigates-deadlyviolence-pro-monarchy-rally-2025-03-29/.

10 "Home Ministry Warns RPP against Protests in Restricted Zones", The Kathmandu Post, April 19, 2025, https:// kathmandupost com/national/2025/04/19/home-ministrywarns-rpp-against-protests-in-restricted-zones

11 Sujeev Shakya, "Nepal’s Economic Transformation Amidst Political Challenges", Institute of South Asian Studies, National University of Singapore, April 23, 2025, https://www isas nus edu sg/papers/nepals-economic-transformationamidst-political-challenges/.

12 Amish Raj Mulmi, "The Incomplete End of Nepal’s Hindu Monarchy", Himal Southasian, April 7, 2025, https://www himalmag com/politics/nepal-monarchy-protests-hindutvaindia-rss

13 Anil Giri, "Congress Shields Home Minister as Visit Visa Scam Sparks Uproar", The Kathmandu Post, May 27, 2025, https://kathmandupost com/politics/2025/05/27/congressshields-home-minister-as-visit-visa-scam-sparks-uproar.

14 "Parliament Postponed until Thursday amid Continued Opposition Obstruction", Republica, June 12, 2025, https://myrepublica nagariknetwork com/news/parliamentpostpone-until-thursday-amid-continued-oppositionobstruction-40-37 html

15 "TERAMOCS Case: CIAA Files Corruption Case Against 16 Including Former Minister Basnet", My Republica, May 15, 2025, https://myrepublica.nagariknetwork.com/news/ teramocs-case-ciaa- -corruption-case-against-16including-former-minist-85-54 html

16 "Corruption Case Filed Against NC Leader Mohan Basnet, 15 Others over Teramocs Procurement Scam", Setopati,

May 15, 2025, https://en setopati com/political/164606

17 Binod Ghimire, "Ex-PM Nepal, 92 Others Charged in Patanjali Land Scam", The Kathmandu Post, June 6, 2025, https://kathmandupost com/national/2025/06/06/ex-pmnepal-92-others-charged-in-patanjali-land-scam

18 "Madhav Nepal Becomes First Former PM to Be Indicted by CIAA for Corruption", My Republica, June 5, 2025, https://myrepublica.nagariknetwork.com/news/madhav-nepalbecomes- -former-pm-to-be-indicted-by-ciaa-forcorruption-69-61 html

19 "Top Court Refuses to Release Lamichhane in Cooperative Funds Embezzlement Case", The Kathmandu Post, May 23, 2025, https://kathmandupost com/ national/2025/05/23/supreme-court-upholds-custody-ofrabi-lamichhane-in-cooperative-fraud-case

20

Bail Appeal", Khabarhub, May 5, 2025, https://english khabarhub com/2025/05/464327/

21 "SC Upholds Rabi Lamichhane's Custody in Cooperative Fraud Case", Republica, May 23, 2025, https:// myrepublica nagariknetwork com/news/sc-upholds-rabilamichhanes-custody-in-cooperative-fraud-case-65-63 html

22 "Chauthaiwale Busy Meeting Nepali Leaders", The Kathmandu Post, May 2, 2025, https://kathmandupost.com/ national/2025/05/02/chauthaiwale-busy-meeting-nepalileaders

23 "Senior BJP Leader Vijay Chauthaiwale in Kathmandu", My Republica, April 30, 2025, https://myrepublica nagariknetwork com/news/senior-bjp-leader-vijaychauthaiwale-in-kathmandu-24-98 html

24

to Thailand During 1–5 April 2025", Ministry of Foreign Affairs, Kingdom of Thailand, March 26, 2025, https://www.mfa.go.th/en/ content/npvteg

25 "Nepal and Thailand Ink 8 Landmark MoUs to Strengthen Bilateral Ties During PM Oli's Historic Visit", Republica, April 3, 2025, https://www myrepublica nagariknetwork com/news/nepal-and-thailand-ink-8landmark-mous-to-strengthen-bilateral-ties-during 71-89 html

26 "Prime Minister Oli Terms Thailand Visit a Historic Success", The Kathmandu Post, April 5, 2025, https:// kathmandupost com/national/2025/04/05/prime-minister-oliterms-thailand-visit-a-historic

27 Unique Shrestha, "Janakpur High Court Acquits NC Leader Mohammad Aftab Alam", Setopati, May 28, 2025, https:// en setopati com/political/164668

"Former Minister Aftab Alam Acquitted by High Court 28 in 2008 Rautahat Murder Case", The Kathmandu Post, May 28, 2025, https://kathmandupost com/national/2025/05/28/ former-minister-aftab-alam-acquitted-by-high-court-in2008-rautahat-murder-case

29 Madan Thakur, "Former Minister Alam’s Release Sparks Discontent Among Victims, Supporters Elated", My Republica, May 30, 2025, https://myrepublica nagariknetwork com/news/former-minister-alams-release-sparks-discontentamong-victims-but-brings-ex-55-79 html

30

“World Economic Outlook”, International Monetary Fund, accessed on April 23, 2025. https://www imf org/en/ Publications/WEO/ Issues/2025/04/22/world-economic-

outlook-april-2025

31 ibid

32 “Total Population by Sex”, United Nations Data Portal Population Divisions, accessed on February 22, 2025. https:// population.un.org/dataportal/data/indicators/49/locations/900/ start/2024/end/2025/line/linetimeplotsingle?df=f3331b64b1c9-4073-b792-7f7793b8bd17

33 “FAO Food Prices Index”, Food and Agriculture Organization of the United Nations, February 7, 2025. https:// www.fao.org/worldfoodsituation/foodpricesindex/en/

34 Era Dabla-Norris, Davide Furceri, Raphael Lam and Jeta Menkulasi. “Global Public Debt Is Probably Worse Than it Looks”, International Monetary Fund, October 15, 2024. https:// www.imf.org/en/Blogs/Articles/2024/10/15/global-public-debtis-probably-worse-than-it-looks

35 “Highlights: Trump Imposes Vast Global Tariffs”, The New York Times, April 2, 2025 https://www nytimes com/ live/2025/04/02/business/trump-tariffs-liberation-day

36 “Joint Statement on U.S.-China Economic and Trade Meeting in Geneva”, The White House, May 12, 2025 https:// www whitehouse gov/ -statements/2025/05/jointstatement-on-u-s-china-economic-and-trade-meeting-ingeneva/

37 “Trump Tariffs Ruled Illegal by Federal Judicial Panel”, The New York Times, May 28, 2025, https://www nytimes com/2025/05/28/business/trump-tariffs-blocked-federalcourt.html

38 “Colombia joins the Belt and Road for a more equitable global economy”, China Daily, May 16, 2025 https://www chinadaily com cn/a/202505/16/ WS68267dcca310a04af22bfb81 html

39 “‘Tidal wave’: How 75 nations face the Chinese debt crisis in 2025”, Aljazeera, May 28, 2025 https://www aljazeera com/news/2025/5/28/tidal-wave-how-75-nations-facechinese-debt-crisis-in-2025

40 “What we know about India's strikes on Pakistan and Pakistan-administered Kashmir”, BBC News, May 8, 2025 https://www bbc com/news/articles/cj6868pdpw4o

41 “Missiles, drones and airstrikes, until a sudden

CNN World, May 13, 2025 https://edition cnn com/2025/05/12/ asia/india-pakistan-kashmir- -intl-hnk

42 “Russia-Ukraine war: List of key events, day 1,196”, Alzajeera, June 4, 2025 https://www aljazeera com/ news/2025/6/4/russia-ukraine-war-list-of-key-eventsday-1196

43 accessed on 4 June, 2025 https://geneva-academy ch/galleries/ today-s-armed-

44 “Tariffs Bite: North American and Asian Manufacturers Retrench in April”, GEP, May 13, 2025, https://www.gep. com/newsroom/tariffs-bite-north-american-and-asianmanufacturers-retrench-april-global-material

45 “Report: North American manufacturers retrenched in March”, DC Velocity, April 10, 2025 https://www dcvelocity com/editorial/featured/report-north-american-manufacturersretrenched-in-march

46 “Global employment forecast downgraded by up to 7 million jobs in 2025 amid rising uncertainty”, International Labour Organization, May 28, 2025 https://www.ilo.org/ resource/news/global-employment-forecast-downgraded-7million-jobs-2025-amid-rising

47 Ibid

48 “Allianz Trade Global Survey 2025: Trade war, trade deals and their impacts on companies”, Allianz Trade, May 20,2025 https://www allianz com/en/economic research/ insights/publications/specials fmo/250520-global-tradesurvey.html

49

as trade war worries dwarf deal hopes”, CNBC, May 20, 2025 https://www.cnbc.com/2025/05/20/chinese-businesses-aremoving-away-from-the-us-despite-trade-truce html

50 “Allianz Trade Global Survey 2025: Trade war, trade deals and their impacts on companies”, Allianz Trade, May 20,2025 https://www allianz com/en/economic research/ insights/publications/specials fmo/250520-global-tradesurvey html

51 “World Economic Outlook: Global Growth- Divergent and Uncertain.” International Monetary Fund, January, 2025, https://www imf org/en/ Publications/WEO/ Issues/2025/01/17/ world-economic-outlook-update-january-2025

52 “World Economic Outlook, April 2025; A Critical Juncture amid Policy Shifts” ” International Monetary Fund, April, 2025. https://www imf org/en/ Publications/WEO/ Issues/2025/04/22/world-economic-outlook-april-2025

53 “G7 Finance Ministers and Central Bank Governors’ Communiqué, Banff, Alberta”, Council of the European Union, accessed on June 4, 2025, https://www consilium europa eu/en/ press/press-releases/2025/05/23/g7- -ministers-andcentral-bank-governors-communique-banff-alberta-20-22may-2025/

54 “G7 Finance Ministers and Central Bank Governors’ Meeting”, G7 Canada, accessed on June 4, 2025, https:// g7 canada ca/en/canadian-presidency/events-calendar/g7-ministers-and-central-bank-governors-meeting/

55 Ibid

56 “G7 Finance Ministers and Central Bank Governors’ Meeting”, G7 Canada, accessed on June 4, 2025, https:// g7 canada ca/en/canadian-presidency/events-calendar/g7-ministers-and-central-bank-governors-meeting/

57 “Election process for next pope commences with papal conclave”, ABC News, May 8, 2025, https://abcnews go com/ International/election-process-pope-commencespapal-conclave/story?id=121526125

58 “Robert Francis Prevost, Now Leo XIV, Is First American Pope”, The New York Times, May 8, 2025, https://www nytimes com/live/2025/05/08/world/pope-conclave-news

59 “Unimpresa Study Centre Report”, Unimpresa, accessed on June 4, https://www unimpresa it/tra-funerale-econclave-business-da-600-milioni-per-roma/66961

60

“Current Macroeconomic and Financial Situation

Table Based on Nine Months of Data,” Nepal Rastra Bank. https://www nrb org np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months “Nepal and the IMF,” International Monetary Fund, 61 Accessed June 2, 2025. https://www imf org/en/Countries/ NPL

62

“Current Macroeconomic and Financial Situation

Table Based on Nine Months of Data,” Nepal Rastra Bank. https://www.nrb.org.np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months

“Midterm Review of Monetary Policy 2081/82,” Nepal 63 Rastra Bank. https://www nrb org np/contents/uploads/2025/02/ MidtermReview-of-MP-2081-82 pdf

64

“Nepal Development Update – April 2025: Leveraging Resilience and Implementing Reforms for Boosting Economic Growth,” The World Bank. https://documents1.worldbank.org/curated/ en/099951004022532326/pdf/ IDU-c2bf0781-1145-46398b64-321016ade046 pdf

65

66

Ibid

“Current Macroeconomic and Financial Situation

Table Based on Nine Months of Data,” Nepal Rastra Bank. https://www nrb org np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months

67

68

Ibid

Ibid

69 Ibid

“Budget Speech 2082/83,” Ministry of Finance, 70 Government of Nepal. https://mof gov np/content/1523/budget-speech-2082-83/

71 Ibid

“Budget works begin under Rs1.9 trillion ceiling for 72

https://kathmandupost com/money/2025/03/02/budgetworks-begin-under-rs1-9-trillion-ceiling-for-next- -year 73 “Budget Speech 2082/83,” Ministry of Finance, Government of Nepal.

https://mof gov np/content/1523/budget-speech-2082-83/

74 Ibid

75 Ibid

76 Ibid

77 Ibid

78 Ibid

79 Ibid

80 Ibid

81 Ibid

82 Ibid

83 Ibid

“Current Macroeconomic and Financial Situation 84

Table Based on Nine Months of Data,” Nepal Rastra Bank. https://www nrb org np/category/current-macroeconomic-si tuation/?department=red&fy=2081-82&subcategory=ninemonths

85 Ibid

86 Ibid

87

“Nepal Public Expenditure Review: Fiscal Policy for Sustainable Development,” The World Bank. https://documents1 worldbank org/curated/ en/099835012032119520/pdf/ P17208601e4d9102009d990f17 6775b9f18 pdf

“Current Macroeconomic and Financial Situation 88 Table Based on Nine Months of Data,” Nepal Rastra Bank. https://www nrb org np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months 89 Ibid 90 Ibid 91 Ibid

92 Current Macroeconomic and Financial Situation of Nepal (Based on nine-months data ending mid-April 2024/25) - English,” Government of Nepal, May 2025. https://www.nrb.org.np/red/current-macroeconomic-andenglish-based-on-nine-months-data-of-2024-25-2/

93 Ibid

94 “Current Macroeconomic and Financial Situation of Nepal (Based on nine-months data ending mid-April 2024/25),” Government of Nepal, May 2025. https://www nrb org np/red/current-macroeconomic-and-situation-tables-based-on-nine-months-dataof-2024-25/current-macroeconomic-situation-tables-basedon-nine-months-data-of-2081-82/

95 "Investment Board’s Strategic Plan: 11 Projects to Be Taken into Operation and 74 to Move Forward." My Republica, May 2025. https://myrepublica nagariknetwork com/index php/ news/investment-boards-strategic-plan-11-projects-to-betaken-into-operation-and-74-33 html

96 Ibid

97 Govt Enforces New Foreign Aid Policy for Effective Use of Foreign Assistance." My Republica, May 2025 https:// www myrepublica nagariknetwork com/news/govt-enforcesnew-foreign-aid-policy-for-effective-use-of-foreignassistanc-97-27 html

98 "Foreign Aid Policy 2025: Projects Financed with Foreign Loans Will Not Receive Tax Exemption." New Business

Age, May 2025. https://newbusinessage com/article/foreignaid-policy-2025-projects- -with-foreign-loans-willnot-receive-tax-exemption

99 Ministry of Finance, Nepal. "Foreign Aid Commitments: Fiscal Year 2079/80 (FY)." Accessed June 2025. https://mof gov np/content/1173/foreign-aid-commitments-year-207980 fy/

100 Ibid

101

The Kathmandu Post, May 13, 2025. https://kathmandupost com/national/2025/05/13/nepal-awaits-word-on-mcc-as-shutdown-looms

102 "Bill to Establish Alternative Development Finance Funds Registered in Parliament." Business 360, April 7, 2025. https://www b360nepal com/detail/25017/bill-to-establishalternative-development- -funds-registered-inparliament

103

"Nepal: IMF Completes the Fifth Review Under the Extended Credit Facility Arrangement." International Monetary Fund, March 14, 2025. https://www imf org/en/ News/ Articles/2025/03/14/pr25063-nepal-imf-completes-the-review-under-the-extended-credit-facility-arrangement 104 Ibid

105

“Current Macroeconomic and Financial Situation of Nepal (Based on nine-months data ending mid-April 2024/25),” Government of Nepal, May 2025. https://www.nrb.org.np/red/current-macroeconomic-and-situation-tables-based-on-nine-months-dataof-2024-25/current-macroeconomic-situation-tables-basedon-nine-months-data-of-2081-82/

108

“Govt declares 2025-35 as Internal Employment Promotion Decade”, Republica, March 10, 2025

110

“Government unveils Internal Employment Promotion Decade”, The Rising Nepal, March 10, 2025. https://risingnepaldaily com/news/58427

Current Macroeconomic and Financial Situation Table 111 Based on Nine Months of Data,” Nepal Rastra Bank. https://www nrb org np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months

“Federation of Nepal Gold and Silver Dealer’s Association”, https://www fenegosida org/ Current Macroeconomic and Financial Situation Table 130 Based on Nine Months of Data,” Nepal Rastra Bank. https://www nrb org np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months 131

“Federation of Nepal Gold and Silver Dealer’s Association”, https://www fenegosida org/

Current Macroeconomic and Financial Situation Table 132 Based on Nine Months of Data,” Nepal Rastra Bank.

https://www nrb org np/category/current-macroeconomic-situa tion/?department=red&fy=2081-82&subcategory=nine-months

133 Ibid

134 Ibid

135 Ibid

136 Ibid

137 “Economic Survey 2023/24 | Ministry of Finance.” 2023. Mof.gov.np. 2023. https://mof gov np/content/281/ economic-survey-2023-24/

138 Ibid

139 Rastra Bank, Nepal. n.d. “Current Macroeconomic and Financial Situation of Nepal (Based on Nine Months Data Ending

Accessed June 5, 2025. https://www nrb org np/contents/ uploads/2025/05/Current-Macroeconomic-and-FinancialSituation-English-Based-on-Nine-Months-data-of-2024.25-1 pdf

140 Ibid

141 Ibid

142 Ibid

143 Ibid

144 Ibid

145 Ibid

146 Ibid

147 ‘Egg prices rise as heatwave hits production’, The Himalayan, Accessed on 6 June 2025. https:// thehimalayantimes.com/business/egg-prices-rise-asheatwave-hits-production

148 ‘Relief for farmers after egg prices rise’, Gorkaphatra, Accessed on 6 June 2025. https://gorkhapatraonline com/ news/157244

149 ‘Chicken and egg prices surge’, The Kathmandu Post, Accessed on 6 June 2025. https://kathmandupost com/ money/2025/05/12/chicken-and-egg-prices-surge

150 “Govt. to import 600,000 metric tons of chemical fertilizer”, The Rising Nepal, May 30, 2025, https:// risingnepaldaily com/news/62760

151 ‘Govt to increase chemical fertilizer supply to 600,000 metric tons’, Republica, Accessed on 6 June 2025. https://myrepublica nagariknetwork com/news/govt-toincrease-chemical-fertilizer-supply-to-600000-metrictons-88-27 html

152 ‘Nepal lifts ban on select dairy imports from India’, The Kathmandu Post, Accessed on 6 June 2025. https:// kathmandupost com/money/2025/05/29/nepal-lifts-ban-onselect-dairy-imports-from-india

153 ‘Nepal to consider request for import of certain dairy products from India’, Times of India, Accessed on 6 June 2025. https:// indiatimes com/business/ india-business/nepal-to-consider-request-for-import-ofcertain-dairy-products-from-india-commerce-ministry/ articleshow/117179537 cms

154 ‘Nepal lifts ban on select dairy imports from India’, The Kathmandu Post, Accessed on 6 June 2025. https:// kathmandupost com/money/2025/05/29/nepal-lifts-ban-onselect-dairy-imports-from-india

155 “ICIMOD.” 2022. Facebook.com. 2022. https:// www facebook com/icimod/posts/nepal-celebrates-its-national-yak-daynepal-made-history-as-the-yak-r/1100779668746112/.

156 “First National Yak Day: Agriculture Minister Calls for Organized Efforts to Protect Yaks.” 2025. GorakhaPatra. 2025. https://risingnepaldaily com/news/60644

157 ibid

158 ibid

159 News, Ecosphere. 2025. “Nepal Declares National Yak Day: A Milestone for Himalayan Heritage and Sustainability.” Ecospherenews.com. 2025. https://www.ecospherenews.com/ detail/742

160 THT Online. 2025. “Budget FY 2082/83: Rs 57.48 Billion Allocated for Agriculture and Livestock Development.” The Himalayan Times. May 29, 2025. https://thehimalayantimes com/business/budget-fy-208283-rs-5748-billion-allocatedfor-agriculture-and-livestock-development

161

162

Ibid

Ibid

163 Deepak Kharel. 2025. “Government Allocates Rs 57.48 Billion for Agriculture and Livestock Development.” Epardafas. com. 2025.https://english.pardafas.com/government-allocatesrs-57-48-billion-for-agriculture-and-livestock-development/ 164 “Government Cuts Budget for Agriculture Sector.” 2025. @Kathmandupost. The Kathmandu Post. 2025. https:// kathmandupost com/money/2024/05/28/government-cutsbudget-for-agriculture-sector

165 CEO Tab. 2025. “NRB Study Reveals Massive Misuse of Subsidized Loans in Agriculture and Primary Sectors.” CEO Tab. May 26, 2025. https://ceotab.com/nrb-study-revealsmassive-misuse-of-subsidized-loans-in-agriculture-andprimary-sectors/

166 “Over 30 Percent of Subsidized Loans for Primary Sectors Misused: NRB”, Republica, May 25, 2025, https:// myrepublica nagariknetwork com/news/over-30-percent-ofsubsidized-loans-for-primary-sectors-misused-nrb-49-41 html

167 Ibid

168 Ibid

169

“NRB Study Reveals Massive Misuse of Subsidized Loans in Agriculture and Primary Sectors”, CEO Tab, May 26, 2025, https://ceotab com/nrb-study-reveals-massive-misuseof-subsidized-loans-in-agriculture-and-primary-sectors/

170 “Nepal-India Sign New MoU to Promote Agricultural Cooperation.”, Republica, August 8, 2024, https://myrepublica nagariknetwork com/news/nepal-india-sign-new-mou-topromote-agricultural-cooperation-11-30.html.

171 “India and Nepal Sign MoU to Boost Agricultural Cooperation.” 2025. Nepal News. 2025. https://nepalnews com/s/diplomacy/india-and-nepal-sign-mou-to-boostagricultural-cooperation/

172 Damodar Bhattarai, “Nepal–India Agreement Aims to Uplift Farmers and Strengthen Markets”, Nepal Aaja, April 9, 2025, https://www nepalaaja com/2025/4/202549113341

173 Ibid

174 Bay, Home-The. 2025. “3rd BIMSTEC Ministerial Meeting on Agriculture Was Held on 09 April in Kathmandu.” Bimstec.org. 2025. https://bimstec org/event/249/3rd-bimstecministerial-meeting-on-agriculture-was-held-on-09-april-inkathmandu?utm

175 World Economics, “Nepal: ESG Index, Data & Review,” World Economics, 2025. https://www worldeconomics com/ country-reviews/nepal/?Section=ESG#Tabs.

176 Central Bureau of Statistics, Nepal Statistical Year Book 2023, Government of Nepal, 2023. https://nsonepal gov np/content/13329/nepal-statistical-year-book-2023/

177 Ibid

178 My Republica, “Parliament Postponed until Thursday amid Continued Opposition Obstruction,” My Republica, June 5, 2025. https://myrepublica.nagariknetwork.com/news/156766/

179 Central Bureau of Statistics, Nepal Statistical Year Book 2023, Government of Nepal, 2023. https://nsonepal.gov. np/content/13329/nepal-statistical-year-book-2023/

180 The Kathmandu Post, “Teachers Continue Protest in Kathmandu Demanding School Education Act,” April 7, 2025. https://kathmandupost com/visual-stories/2025/04/07/ teachers-continue-protest-in-kathmandu-demanding-schooleducation-act

181 Ibid

182 “Education Budget Sees No Departure”, The Kathmandu Post, May 30, 2025. https://kathmandupost com/

money/2025/05/30/education-budget-sees-no-departure

183 “Nepal Education Budget 2082/83”, Edusanjal, May 29, 2025. https://edusanjal com/news/nepal-educationbudget-2082-83/

184 “Govt Allocates Rs 211 Billion for Education, Ups Early Childhood and Midday Meals”, My Republica, May 30, 2025. https://myrepublica nagariknetwork com/news/govt-allocatesrs-211-billion-for-education-ups-early-childhood-andmidday 98-51 html

185 “TU Vice Chancellor Baral resigns citing political interferences in his works”, My Republica, March 31, 2025, https://myrepublica nagariknetwork com/news/tu-vicechancellor-baral-resigns-citing-political-interferences-in-hiswork-66-44 html

186 Ibid

187 “Rector KC appointed acting TU vice chancellor after Baral’s abrupt resignation”, The Kathmandu Post, April 15, 2025, https://kathmandupost.com/national/2025/04/15/rector-kcappointed-acting-tu-vice-chancellor-after-baral-s-abruptresignation

188 “Dr Arjun Karki appointed as Vice-Chancellor of Nepal University”, My Republica, May 4, 2025, https:// myrepublica nagariknetwork com/news/dr-arjun-karkiappointed-as-vice-chancellor-of-nepal-university-25-66 html

189 “Dr. Arjun Karki Appointed Vice-Chancellor of University of Nepal”, EduSanjal, May 4, 2025, https://edusanjal com/news/dr-arjun-karki-appointed-vice-chancellor-ofuniversity-of-nepal/ “Nepal to offer free visas to attract foreign students”, 190 The Kathmandu Post, May 29, 2025, https://kathmandupost com/national/2025/05/29/nepal-tooffer-free-visas-to-attract-foreign-students

191 “Govt announces free visa for foreign students”, The Himalayan Times, May 29, 2025, https://thehimalayantimes com/kathmandu/govt-announces-free-visa-for-foreignstudents

192 Brandon Drenon and James FitzGerald , “US halts student visa appointments and plans expanded social media vetting”, BBC News, May 28, 2025, https://www bbc com/news/ articles/cy75eenl46eo

193 Sudip Kaini, “Confusion among Nepali students due to US visa restrictions”, Kantipur, June 5, 2025, https://ekantipur com/en/news/2025/06/05/confusion-among-nepali-studentsdue-to-us-visa-restrictions-38-34 html

194 Ibid

195 Tripti Shahi, “Religious schools in Karnali are struggling https:// kathmandupost com/karnali-province/2025/04/16/religiousschools-in-karnali-are-struggling-to-stay-

196 Ibid

197 Jyoti Katuwal, “Humla literate declaration”, Kantipur, May 23, 2025, https://ekantipur com/en/ Education/2025/05/23/ humla-literate-declaration-59-22 html

198 “Humla records over 96% literacy rate”. The Rising Nepal, April 24, 2025, https://risingnepaldaily com/news/60857

199 Current Macroeconomic and Financial Situation of Nepal (based on annual data, FY 2023/24 AD (FY2080/81 BS))

200 Daily Operations Report NEA https://www.nea.org.np/ dailyOperationalReports

201 Department of Education, Nepal, "License 54," accessed June 2, 2025, https://doed gov np/license/54

202 "Nepal's Ambitious Energy Vision." Kathmandu Post, April 20, 2025 https://kathmandupost com/ columns/2025/04/20/nepal-s-ambitious-energy-vision

203 Current Macroeconomic and Financial Situation of Nepal (based on annual data, FY 2023/24 AD (FY2080/81 BS))

204 IBID

205 Daily Operations Report NEA https://www.nea.org.np/ dailyOperationalReports

“Nationally Determined Contribution (NDC) 3.0 206 (Draft)”, Ministry of Forests and Environment, Government of Nepal, April 4, 2025. https://www mofe gov np/uploads/uploads/notices/nepals-ndc30-draftmofepdf-1883-1121744095024 pdf

“Govt approves ambitious energy plan to generate 207 28,500 MW in a decade”, Nepal Khabar, January 1, 2025. https://en nepalkhabar com/news/detail/12191/ Yanki Ukyab, “Nepal’s billion-dollar smog”, The 208 Kathmandu Post, May 4, 2025. https://kathmandupost com/columns/2025/05/04/nepal-sbillion-dollar-smog# 209 Ibid.

210 in public places”, My Republica, March 1, 2025. https://myrepublica nagariknetwork com/news/kmc-toimpose-up-to-rs-15000-in- -for-littering-in-publicplaces-94-18.html

“Volume of waste in Bancharedanda decreases with 211 segregation policy”, Nepal News, April 28, 2025. https://nepalnews com/s/society/volume-of-waste-inbancharedanda-decreases-with-segregation-policy/

“Sagarmatha Dialogue concludes with 25-point call”, 212 Singha Darbar, May 18, 2025. https://singhadarbar com/en/sagarmatha-dialogue-concludeswith-25-point-call-2/

“Nepal Upholds Current EV Tax Rates in 2025/26 213 Budget”, New Business Age, May 29, 2025. https://newbusinessage com/article/nepal-retains-existing-evtax-policy-for- -year-202526

“Budget 2082/83: Taxes on Electric Vehicles Remain 214 Unchanged”, Nepal Drives, May 29, 2025. https://www nepaldrives com/budget-208283-taxes-onelectric-vehicles-remain-unchanged

“Energy Minister Khadka and his Indian counterpart 215 inspect Arun III project”, My Republica, https://myrepublica nagariknetwork com/news/energyminister-khadka-and-his-indian-counterpart-inspect-arun-iiiproject-57-78 html

“Nepal and India ministers inspect Arun III 216 Hydropower Project”, Khabar Hub, April 22, 2025. https://english khabarhub com/2025/22/460199/

“Huawei and CNI push Nepal toward green energy 217 at solar PV & energy storage dialogue”, Fiscal Nepal, March 11, 2025. https://www com/2025/03/11/19807/huawei-andcni-push-nepal-toward-green-energy-at-solar-pv-energystorage-dialogue/

“Huawei Digital Power and CNI Drive Sustainability 218 at Solar PV & Energy Storage Dialogue”, Huawei Digital Power, March 11, 2025.

https://digitalpower huawei com/en/news-fusionsolar/3191 html

“India approves additional 600 MW power import for 219 Nepal during nighttime”, Bizness News, March 27, 2025. https://english biznessnews com/posts/india-approvesadditional-600-mw-power-import-for-nepal-duringnighttime-

220

“India approves 600 MW additional power for Nepal to ease electricity shortage”, My Republica, March 28, 2025. https://www.myrepublica.nagariknetwork.com/news/indiaapproves-600-mw-additional-power-for-nepal-to-easeelectricity-shorta-38-66 html

“Cross-Border Energy Boost: India Sends 600 MW to 221 Nepal”, Nepal Energy Forum, April 17, 2025. http://www nepalenergyforum com/cross-border-energyboost-india-sends-600-mw-to-nepal/ 222 Ministry of Finance. “Economic Survey 2080/81.” Government of Nepal, May 223 ibid

224 ibid

225 ibid

226 ibid

227 ibid

228 World Health Organization. "Nepal Becomes Third Country to Launch National Essential In-vitro Diagnostics List, Upgrades Health Security Infrastructure with WHO Support."

Accessed on June 2, 2025. https://www who int/nepal/news/ detail/09-05-2025-nepal-becomes-third-country-to-launchnational-essential-in-vitro-diagnostics-list upgrades-healthsecurity-infrastructure-with-who-support

229 Ibid

230 Ibid

231

deworming tablet”, The Kathmandu Post, April 19, 2025, https:// kathmandupost com/health/2025/04/20/children-under-years-of-age-getting-vitamin-a-and-deworming-tablet

232 Arjun Poudel. “Government Borrowed 2 Million Doses of Vitamin A Capsules, Therapeutic Milk from UNICEF Last Month.” The Kathmandu Post, May 7, 2025. https:// kathmandupost com/health/2025/05/07/governmentborrowed-2-million-doses-of-vitamin-a-capsulestherapeutic-milk-from-unicef-last-month

233 Ibid

234 Government of Nepal, Ministry of Finance. (2025/26). Kathmandu: Ministry of Finance, 2025. https://mof gov np/content/1523/budget-speech-2082-83/

235 Ibid

236 Ibid

237 Ibid

238 Ibid

239 Arjun Poudel, “Covid enters Nepal as cases spike in India”, The Kathmandu Post, June 6, 2025, https:// kathmandupost.com/health/2025/06/06/covid-enters-nepalas-cases-spike-in-india

240 “Nepal is at risk of COVID-19 infections: Experts.”

The Rising Nepal, May 22, 2025. https://risingnepaldaily com/ news/62297

241 Ibid

242 Arjun Poudel, “Covid enters Nepal as cases spike in India”, The Kathmandu Post, June 6, 2025. https:// kathmandupost.com/health/2025/06/06/covid-enters-nepalas-cases-spike-in-india

243 “High-containment unit set up at National Lab, Teku”. The Kathmandu Post, May 10, 2025. https://kathmandupost com/health/2025/05/10/high-containment-unit-set-up-atnational-lab-teku

244 Ibid

245 Telecommunication Indicators Chaitra 2081, Nepal Telecommunications Authority, Accessed on 26 May 2025. https://www nta gov np/uploads/contents/ MIS%20a itra_%E0% A5%A8%E0%A5%A6%E0%A5%AE%E0%A5%A7 pdf

246 Ibid

247 Ibid

248 Current Macroeconomic and Financial Situation

Table Based on Ten Months of Data, Nepal Rastra Bank, Accessed on 2 July 2025. https://www.nrb.org.np/category/ current-macroeconomic-situation/?department=red&fy=208182&subcategory=ten-months

249 Ibid

250 Ibid

251 Ibid

252 Ibid

253 Ibid

254 Digital Nepal Framework 2.0, Ministry of Communication and Information Technology, Accessed on 29 May 2025. https://mocit.gov.np/content/13013/relations-of-thedigital-nepal-framework-2-0/

255 How far has the Digital Nepal Framework come?, Nepal Economic Forum, Accessed on 29 May 2025. https:// nepaleconomicforum org/how-far-has-the-digital-nepalframework-come/

256 Digital Nepal Framework 2.0: Preparations Underway to Boost IT Export Capacity, New Business Age, Accessed on 29 May 2025. https://newbusinessage com/article/digital-nepalframework-20-preparations-underway-to-boost-it-exportcapacity

257 Government of Nepal and World Bank Sign Agreements for $415 Million towards Building Infrastructure for Regional Development & Regional Transport and Trade Connectivity, World Bank, Accessed on 29 May 2025 https:// www worldbank org/en/news/press-release/2022/09/18/ government-of-nepal-and-world-bank-sign-agreementsfor-415-million-towards-building-infrastructure-for-digitaldevelopme ; Restructuring Paper on a Proposed Project Restructuring of Digital Nepal Acceleration Project, World Bank, Accessed on 29 May 2025. https://documents1 worldbank org/curated/en/099052924041540837/pdf/ P17654310a4e280c4193dd1dffe826ebf3d pdf

258 Digital Nepal Framework 2.0: Preparations Underway to Boost IT Export Capacity, New Business Age, Accessed on 29 May 2025, https://newbusinessage com/article/digital-nepalframework-20-preparations-underway-to-boost-it-exportcapacity

259 Register social media or face ban within a month: Ministry, The Rising Nepal, Accessed on 28 May 2025, https:// risingnepaldaily com/news/58979

260 Only four social media platforms registered in Nepal, MyRepublica, Accessed on 28 May 2025. https://www myrepublica nagariknetwork com/news/only-four-socialmedia-platforms-registered-in-nepal-29-45 html / ; Cabinet passes result to regulate social media, The Kathmandu Post, Accessed on 28 May 2025. https://kathmandupost.com/ national/2023/11/10/cabinet-passes-rules-to-regulate-socialmediz

261 Meta to be banned in Nepal if not registered within seven days, Republica, Accessed on 28 May 2025. https://www myrepublica nagariknetwork com/news/meta-to-be-bannedin-nepal-if-not-registered-within-seven-days-49-27 html

262

Meta ignores deadline: Nepal undecided, The Kathmandu Post, Accessed on 28 May 2025. https:// kathmandupost com/national/2025/05/05/meta-ignoresdeadline-nepal-undecided

263 Only four social media platforms registered in Nepal, MyRepublica, Accessed on 28 May 2025. https://www myrepublica nagariknetwork com/news/only-four-socialmedia-platforms-registered-in-nepal-29-45 html

264 Barriers to breakthroughs: women in Nepal’s information and communication technology leadership, Women in Information Technology, Accessed on 28 May 2025. https:// www d4dnepal org/wp-content/uploads/2025/03/ Barriersto-Breakthroughs-Women-in-Nepals-Information-andCommunication-Technology-Landscape pdf

265 Women constitute only 7.88 per cent of ICT workforce, The Annapurna Express, Accessed on 28 May 2025. https://theannapurnaexpress com/story/52682/

266

ever ITES roadshow in the United States, Technologykhabar, Accessed on 29 May 2025. https://technologykhabar com/2025/03/19/195754/

267 ‘CNI, AmCham Nepal showcase IT projects’, The Kathmandu Post, Accessed on 29 May 2025. https:// kathmandupost com/money/2025/03/31/cni-amcham-nepalshowcase-it-projects-in-us

268

ever ITES roadshow in the United States, Technologykhabar, Accessed on 29 May 2025. https://technologykhabar

com/2025/03/19/195754/

269 ‘Telecom, Ncell must pay a 15% penalty for late licence renewal fees’, Republica, Accessed on 28 May 2025. https://myrepublica nagariknetwork com/news/telecom-ncellmust-pay-a-15-penalty-for-late-license-renewal-fees-62-67 html

270 NTA instructs Ncell to pay Rs 19 billion, warns of revoking license if renewal fees is not paid by September 1, Republica, Accessed on 2 June 2025. https://myrepublica nagariknetwork.com/news/nepal-telecommunicationsauthority-instructs-ncell-to-pay-rs-19-billion-license-to-berevoked-if-not-paid-by-september-1

271 NTC pays Rs 20 billion to renew license, Republica, Accessed on 2 June 2025. https://myrepublica nagariknetwork com/news/ntc-pays-rs-20-billion-to-renew-license

272 ‘Telecom, Ncell must pay a 15% penalty for late licence renewal fees’, Republica, Accessed on 28 May 2025. https://myrepublica.nagariknetwork.com/news/telecom-ncellmust-pay-a-15-penalty-for-late-license-renewal-fees-62-67 html

Auditor General urges recovery of billions in unpaid 273 renewal fees from telecom companies, Khabhar Hub, Accessed on 28 May 2025. https://english khabarhub com/2025/14/466820/

274 Govt hospitals’ service to be integrated into Nagarik app, The Rising Nepal, Accessed on 29 May 2025 https:// risingnepaldaily.com/news/61330

275 Ibid.

276 “Economic Survey 2080/81.” Ministry of Finance, https://mof gov np/content/210/economic-survey-2080-81fsubs/

277

“Melamchi Water Distribution Network to Expand Outside Kathmandu’s Ring Road,” MyRepublica, May 6, 2025, https://myrepublica nagariknetwork com/news/melamchiwater-distribution-network-to-be-built-outside-kathmanduvalleys-r-66-97 html

278 Ibid

279

“Melamchi water distribution expanded in Balaju, Nagarjun,” MyRepublica, May 17, 2025, https://myrepublica nagariknetwork com/news/melamchi-water-distributionexpanded-in-balaju-nagarjun-43-17 html

280 “Investment Board's Strategic Plan: 11 projects in operation and 14 under construction in four years”, eKantipur. May 2, 2025. https://ekantipur com/en/business/2025/05/02/ investment-boards-strategic-plan-11-projects-in-operationand-14-under-construction-in-four-years-25-01 html

281 “11 Projects to Start Operations, 14 to Enter Construction.” MyRepublica, May 3, 2025, https://www myrepublica nagariknetwork com/news/investment-boardsstrategic-plan-11-projects-to-be-taken-into-operationand-74-33.html.

282 “Investment Board's Strategic Plan: 11 projects in operation and 14 under construction in four years”, eKantipur. May 2, 2025. https://ekantipur com/en/business/2025/05/02/ investment-boards-strategic-plan-11-projects-in-operationand-14-under-construction-in-four-years-25-01 html

283 “11 Projects to Start Operations, 14 to Enter Construction.” MyRepublica, May 3, 2025, https://www myrepublica nagariknetwork com/news/investment-boardsstrategic-plan-11-projects-to-be-taken-into-operationand-74-33 html

“Tree cutting begins for Dodhara Chandani dry port 284 construction,” The Kathmandu Post, May 9, 2025, https://kathmandupost com/money/2025/05/09/tree-cuttingbegins-for-dodhara-chandani-dry-port-construction

285 Ibid

286 “Dodhara Chandani Dry Port to Expand Nepal’s Trade Accessibility,” SASEC, January 27, 2025 https://www.sasec. asia/index php?page=news&nid=1614 &url=dodhara-chandani-

dryport

Binod Ghimire, “Billions embezzled in Pokhara airport 287 https://kathmandupost com/national/2025/04/18/billionsembezzled-in-pokhara-airport-works-probe288 “Rs 14 billion corruption uncovered in construction of Pokhara Airport,” Republica, April 17, 2025, https://myrepublica nagariknetwork com/news/rs-14-billion-corruption-uncoveredin-construction-of-pokhara-airport-56-63 html

289 Manoj Satyal, “Lingden-led House sub-committee Airport,” Setopati, April 17, 2025, https://en setopati com/ political/164474

290 Bhuwan Sharma, “Procurement regulations amended to extend road project deadline”, My Republica, April 30, 2025, https://myrepublica nagariknetwork com/news/procurementregulations-amended-to-extend-road-project-deadline-23-16 html

291 Vimal Khatiwada, “The procurement regulations have been revised again, the deadline has been extended for projects with slow progress,” eKantipur, April 30, 2025, https:// ekantipur com/en/business/2025/04/30/the-procurementregulations-have-been-revised-again-the-deadline-has-beenextended-for-projects-with-slow-progress-54-20 html

292 Current Macroeconomic and Financial Situation

Table Based on Nine Months of Data, Nepal Rastra Bank, Accessed on 2 July 2025. https://www.nrb.org.np/category/ current-macroeconomic-situation/?department=red&fy=208182&subcategory=ten-months

293 Ibid

Nepal’s FDI commitments surge 33 percent amid 294 policy reforms, The Kathmandu Post, Accessed on 20 May 2025. https://kathmandupost.com/money/2025/05/16/nepal-s-fdicommitments-surge-33-percent-amid-policy-reforms Nepal Tourism Statistics 2023, Ministry of Culture, 295 Tourism and Civil Aviation, Accessed on 20 May 2025 https://www tourism gov np/ /1/ Nepal%20Tourism%20 Statistic pdf

296 Ibid.

297 Ibid.

298 Ibid.

299 Ibid.

300 116,000 foreign tourists visit Nepal in April marking record high, Republica, Accessed on 26 May 2025. https:// myrepublica nagariknetwork com/news/116000-foreigntourists-visit-nepal-in-april-marking-record-high-13-19 html

301 Tourist arrival drops in May, The Rising Nepal, Accessed on 2 July 2025. https://risingnepaldaily.com/ news/62994; Tourist arrival declines 5.1 percent to 121,687 individuals in March, Republica, Accessed on 26 May 2025. https://www myrepublica nagariknetwork com/news/touristarrival-declines-51-percent-to-121687-individuals-inmarch-51-84 html

302 Tourist arrival drops in May, The Rising Nepal, Accessed on 2 July 2025. https://risingnepaldaily.com/ news/62994

303 2nd Lumbini International Peace Festival from March 20, Nepal Tourism Board, Accessed on 26 May 2025. https:// trade.ntb.gov.np/2nd-lumbini-international-peace-festivalfrom-march-20

304 Nepal Tourism Board promotes Buddhist tourism in Myanmar, The Annapurna Express, Accessed on 27 May 2025. https://theannapurnaexpress com/story/52909/

305 Nepal, Thailand sign eight agreements, The Kathmandu Post, Accessed on 27 May 2025. https:// kathmandupost com/national/2025/04/03/nepal-thailandsign-eight-agreements

306 Third edition of Buddhist International Travel Mart to

begin on May 23, The Kathmandu Post, Accessed on 27 May 2025. https://kathmandupost.com/money/2025/04/17/thirdedition-of-buddhist-international-travel-mart-to-begin-onmay-23

307 IATO and NATTA sign MoU to boost cross-border tourism between India and Nepal, Economic Times, Accessed on 28 May 2025. https://travel economictimes indiatimes com/ news/associations/iato-and-natta-unite-to-enhance-crossborder-tourism-between-india-and-nepal/121378304

308 NTB and UNDP launch $5 million ‘Sustainable Tourism Project’, Nepal Tourism Board, Accessed on 28 May 2025. https://trade ntb gov np/ntb-and-undp-launch-5-millionsustainable-tourism-project/

309 Sustainable Tourism for Livelihood Recovery, UNDP, Accessed on 28 May 2025. https://www undp org/nepal/ projects/stlrp

310 NTB and UNDP launch $5 million ‘Sustainable Tourism Project’, Nepal Tourism Board, Accessed on 28 May 2025. https://trade ntb gov np/ntb-and-undp-launch-5-millionsustainable-tourism-project/

311 Everest to no longer be anybody’s to climb, The Kathmandu Post, Accessed on 27 May 2025. https:// kathmandupost com/money/2025/04/26/everest-to-nolonger-to-be-anybody-s-climb

312 Govt plans to limit Everest permits to experienced climbers, Republic, Accessed on 27 May 2025. https://www myrepublica.nagariknetwork.com/news/nepal-plans-to-limiteverest-permits-to-experienced-climbers-67-60 html

313 Nepal eyes tourism, economic boost with new digital nomad visa policy, The Kathmandu Post, Accessed on 29 May 2025. https://kathmandupost com/money/2025/05/28/nepaleyes-tourism-economic-boost-with-new-digital-nomad-visapolicy

314

visa for $100,000 health insurance holders, Insurance Khabar, Accessed on 29 May 2025. https://insurancekhabar com/en/ govt-introduces-digital-nomad-policy- -year-visa-for100000-health-insurance-holders-2/

315

The Kathmandu Post, Accessed on 28 May 2025. https:// kathmandupost com/national/2025/03/03/himalaya-airlinesannounces-pokhara-lhasa-

316 Arrivals of Chinese tourists in Nepal falls short of expectations despite ‘Visit Nepal Year’ efforts, Republica, Accessed on 28 May 2025. https://myrepublica nagariknetwork com/news/arrivals-of-chinese-tourists-in-nepal-falls-shortof-expectations-despite-v-69-63 html

317 Rs 14 billion corruption uncovered in construction of Pokhara Airport, Republica, Accessed on 28 May 2025. https://www myrepublica nagariknetwork com/news/rs-14billion-corruption-uncovered-in-construction-of-pokharaairport-56-63 html

318

2025. https://kathmandupost com/money/2025/04/01/215-96million-new-pokhara-airport-sees- -passenger319 Current Macroeconomic and Financial Situation

Table Based on Nine Months of Data, Nepal Rastra Bank, Accessed on 26 May 2025. https://www nrb org np/category/ current-macroeconomic-situation/?department=red&fy=208182&subcategory=nine-months

“Nepal Rastra Bank, Current Macroeconomic and 320 Financial Situation of Nepal Based on Nine Months’ data Ending Mid-April, 2024/25”, May 11, 2025. https://www nrb org np/contents/uploads/2025/05/CurrentMacroeconomic-and-Financial-Situation-English-Based-onNine-Months-data-of-2024.25-1 pdf

321 “Nepse Alpha Earnings Scoreboard”, nepsealpha, accessed 27 November, 2024,

https://nepsealpha com

“Nepal Rastra Bank, Current Macroeconomic and 322 Financial Situation of Nepal Based on Nine Months’ data Ending Mid-April, 2024/25”, May 11, 2025

https://www nrb org np/contents/uploads/2025/05/CurrentMacroeconomic-and-Financial-Situation-English-Based-onNine-Months-data-of-2024.25-1 pdf

323 Ibid

324 Ibid

325 Ibid

326

“Monetary Policy 2081-82 3rd Quarter Review”, Nepal Rastra Bank, May 25, 2025. https://www nrb org np/contents/uploads/2025/05/ MP Q3_2082 Final-1 pdf

“Dr Biswo Nath Poudel appointed as NRB governor”, 327 myRepublica, 20 May 2025 https://myrepublica nagariknetwork com/news/biswo-nathpoudel-appointed-as-nrb-governor-54-51.html

328 Ibid

329 Anil Giri, “Economist Poudel named Nepal Rastra Bank governor”, The Kathmandu Post, May 21, 2025, https:// kathmandupost com/national/2025/05/21/economist-poudelnamed-nepal-rastra-bank-governor

330 Ibid

331

“Annual Bank Supervision Report 2024”, Nepal Rastra Bank, March 25, 2025, https://www nrb org np/contents/ uploads/2025/03/Annual-Bank-Supervision-Report-2024-3. pdf

“Increasing NPL and accumulation of non-banking 332 assets are major challenges of banks: NRB”, myRepublica, 28 April 2025 https://myrepublica nagariknetwork com/news/increasingnpl-and-accumulation-of-non-banking-assets-are-majorchallenges 62-87 html

333 Ibid

334 Ibid

335 Ibid

“BFIs must maintain minimum 90% daily mandatory 336 cash reserve”, myRepublica, 28 May 2025 https://myrepublica nagariknetwork com/news/ -mustmaintain-minimum-90-daily-mandatory-cash-reserve-14-53 html

337 Ibid

MoU Signed Between NBA & IFC to Strengthen 338 Climate Finance Initiatives”, Nepal Banker’s Association, 25 March 2025 https://nepalbankers com np/mou-signed-between-nba-ifcto-strengthen-climate- -initiatives/ “Suspicious transactions related to money laundering 339 increase by 49 percent”, myRepublica, 21 May 2025 https://myrepublica.nagariknetwork.com/news/suspicioustransactions-related-to-money-laundering-increase-by-49percent-93-57 html

340 Ibid

341 Ibid

342

“Ministry of Finance, Budget Speech of Fiscal Year 2025/26”, 29 May, 2025.

https://giwmscdnone gov np/media/pdf upload/Webside%20 Final%20budget%20Speech%202_15 qbn3jyt pdf

343 Ibid

344

“Datewise Indices”, Nepal Stock Exchange, May 28, 2025. https://www nepalstock com np/indices

345

“Current Macroeconomic and Financial Situation (Based on Nine Months Data Ending Mid-April 2025)”, Nepal Rastra Bank, May 11, 2025.

https://www nrb org np/contents/uploads/2025/05/ Current-Macroeconomic-and-Financial-Situation-English-Based-on-Nine-Months-data-of-2024.25-1.pdf

346 Ibid

347 Ibid

348 Ibid

349

“Market Capitalization”, Nepal Stock Exchange, May 28, 2024. https://www nepalstock com np/marcap

“NRB reduces risk weight for loans against shares to 350 100 percent from 125 percent”, myRepublica, May 26, 2025. https://myrepublica nagariknetwork com/news/nrb-reducesrisk-weight-for-loans-against-shares-to-100-percent-from125-pe-98-16 html

351 Ibid

352 Ibid

“Govt allows Nepalis to take ‘sweat shares’ in foreign 353 companies”, myRepublica, May 29, 2025. https://myrepublica nagariknetwork com/news/govt-allowsnepalis-to-take-sweat-shares-in-foreign-companies-10-23 html

354 Ibid

355 Ibid

“NEPSE revamps closing price as last 15-minute 356 average rule from Thursday”, myRepublica, March 20, 2025. https://myrepublica nagariknetwork com/news/nepserevamps-closing-price-as-last-15-minute-average-rulefrom-thursday-84-14 html#:~:text=ECONOMY-,NEPSE%20 revamps%20closing%20price%20as%20last%20 15%2Dminute%20average%20rule,stock%20prices%20by%20 big%20investors

357 Ibid

358 Ibid

359

IPO-ready companies”, myRepublica, May 8, 2025. https://myrepublica nagariknetwork com/index php/news/ciaaraids-sebon- -seizes-documents-of-89-ipo-readycompanies-52-11 html

360 Ibid

361 Ibid

“SEBON cancels IPOs of 14 companies with low net 362 worth”, myRepublica, May 20, 2025. https://myrepublica nagariknetwork com/news/sebon-cancelsipos-of-14-companies-with-low-net-worth-88-60 html

363 Ibid

364 Ibid

“Govt to restructure SEBON board, replace private 365 sector and law ministry representatives with experts”, May 23, 2025.

https://myrepublica nagariknetwork com/news/govt-torestructure-sebon-board-replace-private-sector-and-lawministry-rep-51-44 html

366 Ibid

367 Ibid

“Ministry of Finance, Budget Speech of Fiscal Year 368 2025/26”, 29 May, 2025. https://giwmscdnone gov np/media/pdf upload/Webside%20 Final%20budget%20Speech%202_15 qbn3jyt pdf

369 Pradeep Panthi and Jeevanath Devkota, "Remittance

ADBI Working Paper Series, no. 1407, 2023, https://www econstor eu/bitstream/10419/296799/1/adbi-wp1407_0 pdf

370

Census of Agriculture Nepal 2021/22: National Report. https:// www.agricensusnepal.gov.np.

371 Berthold Herrendorf, Richard Rogerson, and Akos Valentinyi. 2014. "Growth and structural

372

373 Anuradha Joshi, Wilson Prichard, and Christopher Heady. 2014. "Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research." Journal of Development Studies 50 (10): 1325–1347. https://doi

org/10.1080/00220388.2014.940910

374 Shiva Raj Adhikari and Nirmal Kumar Raut. 2024. Size of Informal Economy in Nepal. Research Report Series CEDECON/ TU/RPT/01. Kathmandu, Nepal: Tribhuvan University.

375 Vitor Gaspar, Gerd Schwartz, Marco Cangiano, Benedict Clements, Richard Hughes, Holger van Eden, Torben Hansen et al. 2015. "Making public investment more

376 Saugat Aryal, Swastik Ghimire, Suraj Tiwari, Yubin Baaniya, and Vishnu Prasad Pandey. 2024. "Evolution and future Herath Gunatilake, Priyantha Wijayatunga, and David RolandHolst. 2020. Hydropower Development and Economic Growth in Nepal. South Asia Working Paper No. 70. Asian Development Bank.

377 John Beirne and Pradeep Panthi. 2025. "Institutional Economics: 101957.

P . O . B o x 7 0 2 5 , K r i s h n a G a l l i , L a l i t p u r - 3 , N e p a l P h o n e : + 9 7 7 1 5 5 4 8 4 0 0 i n f o @ n e p a l e c o n o m i c f o r u m . o r g w w w . n e p a l e c o n o m i c f o r u m . o r g

Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.