Nepal’s Economic Landscape: Nine-Month Review of FY 2024/25 Shows Mixed Signals with Resilient Growth and Cautious Optimism

Kathmandu, Nepal — The Nepal Rastra Bank (NRB) has released the latest macroeconomic and financial report for the first nine months of the fiscal year 2024/25, covering data up to mid-April 2025. The report highlights a mixed but broadly stable economic outlook, marked by moderate inflation, strong remittance inflows, and a resilient external sector despite rising imports.

Inflation Cools Down

Year-on-year (y-o-y) consumer price inflation stood at 3.39% in mid-April 2025, down from 4.61% a year ago. Food and beverage inflation eased to 2.45%, while non-food and service inflation remained slightly elevated at 3.90%. Regionally, the highest inflation was recorded in Koshi Province at 4.91%, and the Mountain region saw the steepest rise at 4.47%.

Wholesale price inflation was 4.20% y-o-y, slightly down from 4.94% the previous year. The salary and wage index showed a growth of just 2.62%, with Sudurpashchim Province leading at 8.08%.

Trade and External Sector Improve

Exports surged by a whopping 65.2% to NPR 188.20 billion, led by items such as soybean oil and polyester yarn, with exports to India rising nearly 93%. Imports rose by 12.2% to NPR 1309.53 billion. Despite the increase in trade deficit to NPR 1121.34 billion, the export-import ratio improved to 14.4% from 9.8% the previous year.

Remittance inflows grew by 10% in NPR terms (7.3% in USD terms) reaching NPR 1191.31 billion. The number of outbound migrant workers also increased. As a result, the current account showed a surplus of NPR 210.22 billion, and the Balance of Payments (BoP) recorded a surplus of NPR 346.23 billion.

Foreign exchange reserves climbed 18.9% to NPR 2426.84 billion (USD 17.63 billion), enough to cover 17.1 months of merchandise imports.

Government Finance: Higher Spending, Healthy Revenue

Total government expenditure reached NPR 998.52 billion, with recurrent expenditure accounting for over two-thirds. Revenue mobilization stood at NPR 831.40 billion, including NPR 744.15 billion in tax revenues. The government's cash balance at NRB swelled to NPR 371.79 billion, up from NPR 93.96 billion in mid-July 2024.

Monetary Sector: Controlled Liquidity and Improved Credit Growth

Broad money (M2) rose by 6.2% during the review period, and by 11.6% y-o-y. Credit to the private sector grew by 7.1% (8.3% y-o-y), with notable increases in lending to the construction, industrial production, and service sectors. Notably, margin lending and trust receipt loans increased significantly, whereas overdraft loans declined by 12.1%.

Bank deposits grew by 5.7%, with fixed deposits taking the largest share at 51%. Lending rates declined across all banking tiers, indicating an easing credit environment.

Capital Market Recovery

The NEPSE index rose to 2662.08 points from 2025.71 a year earlier, and market capitalization reached NPR 4425.40 billion. A total of 8.72 billion shares valued at NPR 859.45 billion were listed. The Securities Board of Nepal approved new securities worth NPR 28.58 billion during the period.