Nepal's Balance of Payments Shows Strong Recovery Despite Past Volatility

Published on June 12, 2025

Nepal’s Balance of Payments (BoP) has shown a significant rebound in recent years, indicating an improving macroeconomic position after periods of instability. According to the latest mid-May data for FY 2024/25, Nepal has recorded a BoP surplus of Rs. 438.5 billion. This marks a notable increase from Rs. 392.6 billion recorded in mid-May of the previous fiscal year, FY 2023/24.

The BoP, which reflects the country’s transactions with the rest of the world, has seen considerable fluctuations over the years. In FY 2019/20, Nepal posted a surplus of Rs. 282.4 billion, which dropped drastically to a mere Rs. 1.2 billion in FY 2020/21. The situation deteriorated in FY 2021/22 when the country recorded a BoP deficit of Rs. 252.4 billion, primarily due to soaring imports, declining remittance inflows, and rising outflows of foreign exchange.

However, the scenario reversed sharply in FY 2022/23 and FY 2023/24, with BoP surpluses of Rs. 285.8 billion and Rs. 502.5 billion respectively. These improvements are attributed to tighter import controls, increased remittance inflows, and tourism recovery post-COVID-19. The mid-May update for 2024/25 further confirms the continuation of this positive trend, showcasing improved foreign reserve management and external sector resilience.

The recovery in BoP not only highlights effective policy interventions by Nepal Rastra Bank but also signals a stabilizing economy that could bolster investor confidence and support monetary stability in the upcoming fiscal periods.

NEPSE Breaks Psychological Barrier: Crosses 3000 Mark, Strong Technical Signals, Institutional Buying Surge

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NEPSE Sees Green for the Eighth Consecutive Day, Investor Sentiment Remains High as Index Nears 3000

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NEPSE in Sawan: Will 2082 Repeat Last Year’s Historic Rally? Over 6% Gain in Four Weeks Sparks Investor Optimism

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NEPSE Maintains Green Streak for 7th Day, Market Cap Hits NPR 4.97 Trillion, RSI Crosses 84

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NRB Extends Reporting Deadline, Banks Shift Focus to Loan Recovery

NRB Extends Reporting Deadline, Banks Shift Focus to Loan Recovery In a recent move aimed at easing operational pressure on banks and financial institutions (BFIs), Nepal Rastra Bank (NRB) has extended the deadline for publishing their financial reports. As a result, most banks have shifted their immediate focus toward interest collection and loan recovery. Previously, NRB required quarterly financial statements to be published within 7 days of the quarter-end, and the annual report within 21 days after the fiscal year-end. With the new directive, banks now have 15 days for quarterly reports and 30 days for annual statements. This additional time is expected to help banks recover outstanding loans and reflect improved financial performance in their reports.

Fresh Faces at the Top: New CEOs Take Charge of Nepal’s Leading Banks

Nepal’s major commercial banks are undergoing a leadership transformation, with six top banks appointing new CEOs between December 2023 and June 2025. These appointments reflect a broader shift toward modernization, digital expansion, risk compliance, and sustainability. Notable leaders include Manoj Gyawali at Nabil Bank and Gorakh Rana at Standard Chartered, both appointed in June 2025; Govinda Ghimire at NMB Bank (April 2025); Surendra Raj Regmi at Global IME Bank (August 2024); Devendra Khanal at Rastriya Banijya Bank (May 2024); and Tilak Raj Pandeya at Nepal Bank Limited (December 2023). This new wave of leadership is expected to enhance innovation, improve governance, and accelerate the growth trajectory of Nepal’s banking sector.

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Imports from China See Double-Digit Growth Across Key Sectors

In the first eleven months of fiscal year 2024/25, Nepal’s imports from China rose by 15.3%, reaching Rs. 314.58 billion. Major commodities alone accounted for Rs. 208.19 billion, growing by 17.5%. Significant increases were seen in items like garlic (up 253%), steel rods and sheets (up 229.8%), solar panels (138.5%), and PVC compounds (153.4%), reflecting strong demand in food, construction, and energy sectors. Consumer goods such as cosmetics, garments, and computers also saw notable growth, while imports of items like smart cards, furniture, and writing paper declined sharply. This trend underscores Nepal’s continued dependency on Chinese goods, particularly for industrial materials, electronics, and daily-use products.

mports of Major Commodities from India Rise by 7.6% Despite Petroleum Decline

Despite a few key declines, notably in petroleum and steel, Nepal’s overall import trajectory from India reflects a recovering and diversifying economy. The growth in industrial inputs, agriculture-related imports, and consumer durables signals rising domestic activity and future infrastructure expansion. With the total imports from India reaching Rs. 977.13 billion in eleven months, India continues to remain Nepal’s dominant trade partner. Policymakers may need to monitor the rising trade imbalance as domestic production remains insufficient to offset the growing import bill.