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The NEPSE Journal

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Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.

All Articles — Page 86

2780 posts

Top4 min read
Reforming Weaknesses Can Restore Confidence in Financial Intermediation
Reforming Weaknesses Can Restore Confidence in Financial Intermediation Nepal’s banking sector, which today operates through mobile apps and digital platforms, traces its roots to a handwritten ledger system introduced nearly nine decades ago. The establishment of Nepal Bank in 1937 marked the formal beginning of institutional banking in the country. Initiated under the leadership of then Prime Minister Juddha Shumsher, the bank laid the foundation for modern financial intermediation at a time when Nepal’s economy was largely informal and cash-based. Nepal Bank was not merely a commercial institution; it functioned as the backbone of the country’s early financial system. Before the creation of Nepal Rastra Bank in 1956, Nepal Bank performed several central banking functions, including currency issuance, treasury management, and financial education. Concepts such as bank accounts, credit instruments, balance sheets, and basic accounting practices were introduced to the public through this institution, shaping Nepal’s early financial literacy.
Dipesh Ghimire8 Jan, 2026
Top5 min read
Hydropower Development in Nepal: Opportunities, Structural Challenges, and the Road Ahead
Hydropower Development in Nepal: Opportunities, Structural Challenges, and the Road Ahead Nepal’s hydropower sector stands at a critical juncture, marked by impressive growth potential alongside persistent structural and institutional challenges. As of mid-2024, the country’s total installed electricity capacity has crossed 3,150 megawatts, with hydropower contributing nearly 95 percent of the total. Thousands of megawatts are under construction, while several large projects remain in various stages of study. With expanding electricity markets in India and Bangladesh and a government target of producing 28,000 megawatts by 2035, hydropower is increasingly viewed as a cornerstone of Nepal’s economic transformation.
Dipesh Ghimire8 Jan, 2026
Fiscal Federalism4 min read
Fiscal Federalism Remains Elusive as Resources Stay Centralized
Fiscal Federalism Remains Elusive as Resources Stay Centralized Nepal’s transition to a federal system was expected to empower citizens by strengthening local and provincial governments financially. In principle, fiscal federalism is not merely about dividing budgets among different tiers of government; it is about enabling people’s economic empowerment through decentralized financial decision-making. However, years into federal implementation, the promise of fiscal federalism remains largely unfulfilled, as financial authority continues to be tightly controlled at the center. Fiscal federalism involves the sharing of revenue generation, expenditure responsibilities, and financial administration among multiple levels of government. In Nepal’s case, this responsibility is constitutionally divided among the federal, provincial, and local governments. While the legal framework—supported by constitutional provisions and intergovernmental fiscal laws—appears robust on paper, practical implementation tells a different story. Financial powers may be distributed in theory, but in practice, local governments continue to operate with limited autonomy.
Dipesh Ghimire7 Jan, 2026
Nepal’s Economy 4 min read
Nepal’s Economy Shows Signs of Recovery, but Structural Pressures Persist
Nepal’s Economy Shows Signs of Recovery, but Structural Pressures Persist Nepal’s economy is gradually emerging from a period of severe stress, and recent macroeconomic indicators suggest that the situation is no longer as alarming as it once appeared. While the overall outlook has improved compared to previous years, the pace of recovery remains uneven, and key components of the economy have yet to generate strong momentum. The government continues to pursue measures aimed at restoring economic stability, but the results so far reflect cautious optimism rather than robust growth. Recent quarterly data point to a significant improvement in the external sector. Remittance inflows have increased by more than 11 percent, providing much-needed support to foreign exchange reserves and household consumption. The balance of payments has shifted into a surplus, while foreign exchange reserves have risen to a level sufficient to cover around 14 months of imports of goods and services. Inflation has remained within the government’s target range, easing pressure on household budgets and reinforcing macroeconomic stability.
Dipesh Ghimire7 Jan, 2026
Top4 min read
Nepal’s Pharmaceutical Industry Grows in Numbers but Struggles for Survival
Nepal’s Pharmaceutical Industry Grows in Numbers but Struggles for Survival Nepal’s pharmaceutical sector has expanded steadily over the past two decades, attracting new investment, creating thousands of jobs, and supplying nearly half of the country’s medicine needs. Despite this growth, domestic drug manufacturers say they are struggling to survive in an environment that favors imports over production and regulation over facilitation. For the last 15 to 20 years, locally manufactured medicines have met around 45 percent of Nepal’s total consumption. The remaining 55 percent continues to be imported, mainly from India, China, Bangladesh, and other countries. While the number of pharmaceutical industries has increased, their share of the domestic market has paradoxically declined, raising concerns about the long-term viability of local production.
Dipesh Ghimire7 Jan, 2026
Top4 min read
Clearing Investment Uncertainty Key to Nepal’s Energy Expansion
Clearing Investment Uncertainty Key to Nepal’s Energy Expansion Nepal’s hydropower sector, long regarded as the backbone of the country’s economic transformation, is facing renewed uncertainty due to policy inconsistencies, regulatory delays, and growing investment risks. Industry stakeholders argue that unless the government urgently addresses these issues, the country’s ambitious energy targets may remain out of reach despite strong private-sector interest and vast natural potential. Small-scale hydropower development in Nepal began gaining momentum in the early 2000s, when investors struggled to secure financing, infrastructure, and construction materials. The situation gradually improved after the mid-2000s, as financial institutions became more familiar with energy projects. A major turning point came in 2015, when the government announced a target of generating 10,000 megawatts of electricity within a decade. This policy signal restored investor confidence and triggered a surge in hydropower development.
Dipesh Ghimire7 Jan, 2026
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Top4 min read
Geopolitics and Global Trade: A System Under Pressure
Geopolitics and Global Trade: A System Under Pressure The structure of today’s global trade system is deeply rooted in the political realignments that followed the Second World War. The end of the war in 1945 did not merely redraw political boundaries; it reshaped the global economic order. The world gradually split into two ideological and economic camps—one led by the United States, advocating liberal democracy, open markets, and capitalism, and the other led by the Soviet Union, promoting state-controlled economies and collective ownership. Trade, investment, and economic cooperation soon became tools of geopolitical influence rather than neutral economic activities. As ideological rivalry intensified, especially after the onset of the Cold War in 1947, economic policy emerged as a strategic weapon. Western countries expanded trade and financial cooperation within their bloc to strengthen political alliances, while the socialist camp pursued economic coordination among allied states. In this polarized environment, international trade was no longer guided solely by efficiency or comparative advantage; it became an extension of foreign policy and global power competition.
Dipesh Ghimire7 Jan, 2026
Top4 min read
Nepal’s Pharmaceutical and Health System Under Strain: Structural Gaps, Regulatory Confusion, and Growing Public Discontent
Nepal’s Pharmaceutical and Health System Under Strain: Structural Gaps, Regulatory Confusion, and Growing Public Discontent Nepal’s pharmaceutical and healthcare system is facing mounting structural challenges, ranging from unhealthy market competition and regulatory ambiguity to procurement inefficiencies and growing public dissatisfaction with service delivery. Despite a domestic medicine market estimated at around NPR 65 billion annually, systemic weaknesses continue to undermine quality, affordability, and long-term sustainability. One of the most pressing concerns is the prevalence of unhealthy competition within the pharmaceutical sector. Industry stakeholders point out that weak regulatory oversight and the absence of world-class testing laboratories have compromised quality assurance. Although laboratory facilities exist in Nepal, many lack modern infrastructure and skilled human resources, limiting their ability to conduct reliable drug quality assessments. This capacity gap has persisted largely due to the government’s inability to expand trained manpower in line with sectoral growth.
Dipesh Ghimire7 Jan, 2026
Top4 min read
Political Change Without Economic Transformation Pushes Nepal Into a Fragile Phase
Political Change Without Economic Transformation Pushes Nepal Into a Fragile Phase Despite decades of political transformation, Nepal continues to struggle with the same economic vulnerabilities that have persisted since the political change of 2007 BS. While governance systems have repeatedly shifted over the past 75 years, tangible improvements in economic conditions have remained elusive. This prolonged gap between political change and economic delivery has steadily weakened investor confidence, directly affecting production, consumption, and overall economic momentum. Economists warn that a prolonged decline in private sector confidence poses a systemic risk. Reduced production and subdued consumption, if sustained, eventually ripple through the entire economy. Without a confident and active private sector, economic recovery remains fragile, regardless of policy intent or political rhetoric.
Dipesh Ghimire6 Jan, 2026
Top3 min read
Government-Owned Company to Develop 454 MW Kimathangka Arun Hydropower Project with Domestic Capital
Government-Owned Company to Develop 454 MW Kimathangka Arun Hydropower Project with Domestic Capital Nepal has taken a significant step toward strengthening domestic investment in large-scale hydropower development, with a financial modality finalized for the 454-megawatt Kimathangka Arun semi-reservoir hydropower project located in Bhote Khola Rural Municipality–2 of Sankhuwasabha district. The project will be developed entirely with domestic capital, marking a strategic shift toward self-reliance in energy infrastructure financing. The total estimated cost of the project, including interest during construction, stands at Rs 97.94 billion. The project will be implemented directly by the government-owned Electricity Generation Company Limited (EGCL), whose shareholders consist primarily of the Government of Nepal and other public sector institutions. The financial structure has been designed with a 70 percent debt component and 30 percent equity, reflecting a balanced risk-sharing approach for a project of this scale.
Dipesh Ghimire6 Jan, 2026

NEPSEtrading

Primary issues

Income & debt

Live market

Read & learn

NEPSE Trading Network

Insights & Analysis

All Articles — Page 86

Reforming Weaknesses Can Restore Confidence in Financial Intermediation

Hydropower Development in Nepal: Opportunities, Structural Challenges, and the Road Ahead

Fiscal Federalism Remains Elusive as Resources Stay Centralized

Nepal’s Economy Shows Signs of Recovery, but Structural Pressures Persist

Nepal’s Pharmaceutical Industry Grows in Numbers but Struggles for Survival

Clearing Investment Uncertainty Key to Nepal’s Energy Expansion

Geopolitics and Global Trade: A System Under Pressure

Nepal’s Pharmaceutical and Health System Under Strain: Structural Gaps, Regulatory Confusion, and Growing Public Discontent

Political Change Without Economic Transformation Pushes Nepal Into a Fragile Phase

Government-Owned Company to Develop 454 MW Kimathangka Arun Hydropower Project with Domestic Capital

NEPSEtrading

Primary issues

Income & debt

Live market

Read & learn

NEPSE Trading Network

Insights & Analysis

All Articles — Page 86

Reforming Weaknesses Can Restore Confidence in Financial Intermediation

Hydropower Development in Nepal: Opportunities, Structural Challenges, and the Road Ahead

Fiscal Federalism Remains Elusive as Resources Stay Centralized

Nepal’s Economy Shows Signs of Recovery, but Structural Pressures Persist

Nepal’s Pharmaceutical Industry Grows in Numbers but Struggles for Survival

Clearing Investment Uncertainty Key to Nepal’s Energy Expansion

Geopolitics and Global Trade: A System Under Pressure

Nepal’s Pharmaceutical and Health System Under Strain: Structural Gaps, Regulatory Confusion, and Growing Public Discontent

Political Change Without Economic Transformation Pushes Nepal Into a Fragile Phase

Government-Owned Company to Develop 454 MW Kimathangka Arun Hydropower Project with Domestic Capital