Nepal’s Economic Landscape Reveals Both Resilience and Significant Structural Strain
Nepal’s latest business indicators showed modest improvements in select sectors alongside persistent financial vulnerabilities. Hydropower, tourism, and digital services offered stability as underlying structural challenges continued.
Market sentiment remained cautious as governance issues, inconsistent project execution, and liquidity stress limited broader economic momentum. Analysts said sustained reforms are required to unlock long-term growth.
NEPSE Gains Reflect Improved Macroeconomic Signals and Sector-Level Optimism
The Nepal Stock Exchange rose more than fourteen points last week, supported by positive macroeconomic indicators from Nepal Rastra Bank. Tourism and hotel shares led sectoral gains.
Trading remained active as Sahas Urja posted the highest turnover and several companies recorded strong price movements. However, traditional financial sectors weakened due to ongoing credit concerns.
Real Estate Activity Declines Sharply, Reducing Government Revenue Collections
Real estate transactions slowed significantly, lowering government revenue across multiple fee categories. Authorities recorded reduced tax and registration income during the first four months of the fiscal year.
Despite regulatory revisions, property activity failed to rebound. Analysts warned that prolonged weakness could intensify fiscal pressures and limit investment in priority sectors nationwide.
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Banking Sector Faces Rising Non-Performing Loans and High Credit-Risk Exposure
Non-performing loans climbed above the central bank’s risk threshold as borrowers struggled with political instability and disrupted market conditions. Several businesses delayed payments amid recent protest-related losses.
Six commercial banks also exceeded recommended credit-to-deposit ratios, heightening liquidity risks. Regulators urged stricter lending discipline and encouraged technological improvements for risk monitoring.
Major Infrastructure and Energy Projects Advance Despite Implementation Challenges
Large hydropower and petroleum projects moved forward as government agencies approved new investments and advanced pipeline construction. Cooperation with India supported energy storage and distribution expansion.
Investment Board Nepal cleared major hydropower commitments and advanced agreements supporting additional renewable capacity. Officials said these projects remain essential for long-term economic diversification.
Consumer Protection, Agriculture, and Public Services Experience Increasing Pressure
The consumer court reported rising complaints across medical, automotive, software, and household service sectors. Officials said awareness of consumer rights continues to grow nationwide.
Farmers in Morang faced severe labor shortages during paddy harvesting, worsening by limited mechanization. Persistent rain and migration patterns intensified delays, raising concerns about food production stability.
Corporate, Industrial, and Public Institutions Report Divergent Financial Outcomes
United Ajod Insurance posted a substantial quarterly loss as expenses sharply exceeded revenue and claims surged. Analysts cited weak governance and ineffective risk management practices.
Other sectors performed more favorably. Foreign students and patients contributed rising inflows to education and health services, reflecting Nepal’s growing regional service role.
