Quick Overview of Nepal’s Business News

Economic Digest provides a condensed yet thorough look at major business developments in Nepal, offering easily digestible summaries of key events. The current economic landscape in Nepal showcases a blend of economic and governance trends. Finance Minister Bishnu Poudel’s budget for the upcoming fiscal year aims to achieve 6% growth by focusing on fiscal discipline, credit expansion, and incentives for the private sector. However, critics such as former minister Sharma and economist Paudel point out structural deficiencies, lack of support for production, and the dominance of the informal sector.

While initiatives like the potato summit and poultry seminar aim to bolster agriculture, the government is facing policy discontent due to transport protests. These protests indicate dissatisfaction with current policies, despite regulatory changes such as cuts in dry fruit duties and the introduction of ride-sharing rules that aim to enhance efficiency and formalization. Nepal continues to grapple with finding a balance between development, resilience, and reform in the face of natural disruptions and digital aspirations.

Finance Minister Poudel has set a growth target of 6% for the next fiscal year, describing the budget as pragmatic and reform-focused. He emphasizes the importance of implementation and highlights achievements in resource planning and financial discipline. Previous growth rates of 7.5% lend credibility to the feasibility of the new target. Poudel also stresses the need for resource mobilization, private sector involvement, support for young entrepreneurs, and reforms in digital banking and eco-friendly mining practices to address public debt and revenue challenges.

Former Finance Minister Sharma has raised concerns about the new budget, citing gaps in supporting agriculture and production. While acknowledging some positive policy directions, Sharma emphasizes the necessity of long-term structural changes. He criticizes the budget for insufficient support to farmers, overreliance on imports, and inadequate capital spending. Sharma calls upon the government to focus on boosting production, mobilizing labor, and investing in key sectors like agriculture, hydropower, and tourism to foster inclusive growth.

Public transport operators have initiated phased protests, blocking the Ring Road in Kathmandu under a “Save Public Transport” campaign and delivering a seven-point demand. If the government fails to respond by the specified date, a nationwide shutdown is threatened. These protests reflect concerns within the transport industry regarding recent government decisions that are perceived to be detrimental to public transport. Transport organizations seek dialogue and policy corrections to address the challenges they are facing.

The government has proposed credit expansion and loan reforms in the 2025/26 budget to stimulate lending activity and address slow credit growth. Efforts include collaborating with Nepal Rastra Bank to establish an Asset Management Company for non-performing loans, along with measures like refinancing, recapitalization, and waivers for struggling businesses. Plans for a neobank introduction to promote digital banking are also in place to boost liquidity, restore business confidence, and modernize the financial sector.