The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
Nepal’s development bonds rose to Rs. 913.7B in mid-August 2025/26, with commercial banks holding the lion’s share. The shift from T-bills to bonds reduces short-term pressure but raises long-term interest risks.
Nepal’s treasury bills fell Rs. 27.1 billion in mid-August 2025/26, as the government shifted borrowing preference to long-term development bonds, easing short-term refinancing pressure but potentially raising future debt costs.
Nepal’s domestic debt hit Rs. 1.27 trillion in mid-August 2025/26, driven largely by development bonds (+Rs. 40B), while treasury bills declined. Commercial banks remain the biggest financiers of government borrowing.
Nepal collected Rs. 84.7B in revenue in the first month of FY 2025/26, down 10.5% year-on-year. VAT and excise supported collections, but income tax and non-tax revenue declines show a mixed fiscal outlook.
Excise tax revenue surged 14.8% to Rs. 13.9B in the first month of FY 2025/26, driven by alcohol, tobacco, and import-related duties. Its share in total revenue has expanded to 16.3%, but dependency on such sources may pose future risks.
Nepal’s income tax revenue slipped 1.8% in 2025/26, marking the first decline in years. Weak corporate profits, informal sector growth, and inflationary pressure are key drivers behind the drop.
Nepal’s revenue fell by 10.5% in mid-August 2025/26, with non-tax income collapsing by 78%, highlighting risks to fiscal stability despite growth in VAT, customs, and excise collections.
Nepal’s fiscal position improved sharply in 2025/26, recording a Rs. 31 billion surplus as revenues and grants outperformed expenditures. Experts view this as a step toward fiscal stability, but warn sustainability will depend on efficient spending and prudent debt management.
Local governments recorded a surplus of Rs. 611 million in mid-August 2025/26, reflecting improved fiscal management, revenue mobilization, and coordination under federalism.
