Cash Surplus in Treasury Soars as Nepal’s Fiscal Balance Improves in 2025/26

Nepal’s fiscal position strengthened notably in the first month of fiscal year 2025/26, with the government’s treasury cash balance reaching Rs. 226.63 billion, the highest in recent years. According to Nepal Rastra Bank’s latest budgetary operation report, the government achieved a fiscal surplus of Rs. 31.14 billion by mid-August 2025, reversing years of early-year deficits.

The improvement stems mainly from higher revenue collection and controlled spending. The government mobilized over Rs. 75.14 billion in revenue and grants, while total expenditure stood at Rs. 44.31 billion, allowing a positive cash flow. Domestic borrowing worth Rs. 40 billion, through development bonds and treasury bills, further supported liquidity management without heavy reliance on foreign loans.

Economists view the rising cash surplus as a sign of improved fiscal discipline and better treasury management under tighter budget control. However, they warn that such surpluses, if unutilized in capital projects, may reflect slow development spending rather than actual fiscal strength. With capital expenditure still trailing behind recurrent spending, the challenge remains to convert this liquidity into productive investment.