Nepal’s economic landscape continues to evolve, with notable developments in various sectors. The Nepal Oil Corporation (NOC) has lowered fuel prices, providing some relief to consumers. The International Monetary Fund (IMF) has disbursed $41.8 million, recognizing Nepal’s reform progress but urging fiscal discipline. Meanwhile, power shortages persist, despite claims of no load shedding, and Nepal faces challenges in capital spending and labor migration. These developments, along with other sector-specific updates, paint a mixed picture of Nepal’s ongoing economic and infrastructure journey.
Fuel Price Reduction Offers Relief
In a significant move to ease economic pressures, the Nepal Oil Corporation (NOC) announced a reduction in the prices of petroleum products, effective from midnight on Saturday. The price of petrol has dropped by Rs 5 per liter, while diesel and kerosene have been reduced by Rs 4 per liter. Consequently, petrol will now cost Rs 163 per liter, and diesel and kerosene will be priced at Rs 151 per liter in the Kathmandu Valley. This price adjustment comes amidst Nepal’s ongoing economic challenges, offering some respite to both consumers and businesses.
IMF Disburses $41.8 Million to Nepal
The International Monetary Fund (IMF) has approved a loan of $41.8 million to Nepal under the Extended Credit Facility (ECF), bringing the total amount disbursed to $289.1 million. The IMF commended Nepal for its efforts in implementing economic reforms but highlighted concerns about weak domestic demand, political instability, and the potential for financial risks. The IMF forecasts a 4.2% growth rate for Nepal in FY2024/25, driven by capital spending and hydropower development. Inflation, spurred by flood disruptions, is expected to stabilize at 5%. However, the IMF also urged the government to strengthen fiscal discipline, reform the financial sector, and implement anti-money laundering measures, especially after Nepal’s inclusion on the Financial Action Task Force (FATF) grey list.
Continued Industrial Power Cuts Amid Promises of No Load Shedding
While Nepal proudly announced the end of household load shedding in 2018, industries continue to face 8 to 12 hours of daily power cuts. Despite 99% electrification for households, industrial demand remains unmet. The Nepal Electricity Authority (NEA) has cited limited electricity exports from India as a contributing factor. The NEA’s leadership, under Kulman Ghising, is credited with eliminating household load shedding, but the country’s dependency on India for electricity highlights the need for effective long-term energy solutions.
Slow Capital Spending Raises Concerns
Nepal’s capital spending has been sluggish, with only 23.37% of the allocated Rs 352.35 billion spent by the end of Falgun. This slow pace of spending raises concerns about the timely implementation of development projects. Overall, the government has spent 45.12% of its annual budget, with recurrent expenditure making up 51.21%. Tax collection has also been slow, reaching just 50.2% of the targeted Rs 1.47 trillion. Experts caution that these delays could hinder Nepal’s long-term economic growth and infrastructure development.
Record 800,000 Nepali Workers Set to Go Abroad
In a continuing trend, Nepal is on track to send a record 800,000 workers abroad this year, driven by limited local job opportunities. According to the Department of Foreign Employment, 529,000 Nepalis secured labor permits in the first eight months of the fiscal year. The highest number of permits was issued in December, with 81,010 granted. With unemployment concerns in Nepal, foreign employment remains a critical lifeline for many citizens.
Nepal’s First Consumer Court Established
Nepal has inaugurated its first Consumer Court on March 15, 2025, in Kathmandu, marking a significant step towards strengthening consumer rights. The court, which was established under the Consumer Protection Act of 2018, will address issues related to unfair trade practices and substandard goods and services. Chief Justice Prakashman Singh Raut emphasized the importance of judicial activism to ensure the court’s credibility. Initially, it will handle cases from the Kathmandu Valley, with plans to expand in the future.
Steady Revenue Growth at Birgunj Customs
The Birgunj Customs Office has reported a steady revenue collection of Rs 109.22 billion during the first eight months of the current fiscal year. Despite falling short of the target of Rs 139.73 billion, the customs office anticipates further growth in the remaining months. Petroleum products and vehicles remain the main sources of revenue. The highest collection was recorded in Poush, followed by Magh and Falgun. Revenue from customs plays a vital role in Nepal’s overall financial health.
Nepal-India Flour Milling Partnership to Boost Food Security
In a bid to enhance food security and improve milling technology, Nepali and Indian flour millers have agreed to collaborate. The agreement, reached during the Milling Vision 2030 seminar in Goa, focuses on technology exchange, training, and expanding wheat production. India plans to establish a technical training center in Lucknow and export 200,000 tons of wheat to Nepal. This collaboration is expected to improve Nepal’s milling industry and contribute to regional food security.
NTA Advocates for ISP Mergers to Strengthen the Market
The Nepal Telecommunications Authority (NTA) has called for mergers among Internet Service Providers (ISPs) to consolidate the market and improve service quality. Despite having 107 registered ISPs, only a few dominate the market. The NTA’s suggestion comes as the internet sector in Nepal has grown significantly, with WorldLink leading the market share. Experts believe mergers could help enhance the overall competitiveness of the market and ensure better service for users.
Electric Microbus Fare Reduction to Encourage Eco-Friendly Travel
Dhawalagiri-Gandaki Transport Service Pvt. Ltd. has reduced fares for electric microbuses operating between Pokhara, Baglung, and Myagdi. This price reduction, which celebrates one year of service, aims to promote eco-friendly travel. The fare for the Pokhara-Baglung route has dropped from Rs 450 to Rs 400, while the Pokhara-Myagdi fare has decreased from Rs 550 to Rs 500. The reduction comes as the demand for electric vehicles continues to rise, with calls for government support to expand charging infrastructure.
Decline in Donations at Pathibhara Temple Amid Protests
The Pathibhara Temple in Taplejung has witnessed a significant decline in donations, with cash offerings dropping from Rs 5.57 million last year to Rs 1.3 million this year. The decrease in donations has been attributed to ongoing protests against a cable car project proposed by IME Group’s subsidiary. The protests have also led to a decrease in visitor numbers, raising concerns about the impact of the project on the temple’s religious and economic significance.
Expanding Duna-Tapari Industry in Khotang Promotes Sustainability
In Khotang, a new duna-tapari (leaf bowl and plate) production business has been launched, using sal leaves as a sustainable alternative to plastic. Entrepreneur Gyan Bahadur Rai aims to reduce plastic waste while providing local employment opportunities. The local municipality plans to promote the use of duna-tapari at religious sites, which is expected to support sustainability and preserve traditional practices.
