Kathmandu, Jan 9: The Nepal Rastra Bank, the central bank of Nepal, has said that the current vital economic indicators look positive in the fist five months of the current fiscal year 2025/26.
According to the Current Macroeconomic and Financial Situation of Nepal based on five months data of 2025/26, remittance inflows increased 35.6 percent to Rs.870.31 billion in the five months of 2025/26 compared to an increase of 4.7 percent in the same period of the previous year. During mid- November to mid-December (Mangsir month), remittance inflows stood at Rs. 183.18 billion. In the same period of the previous year, such inflows were Rs. 118.79 billion.
In the US Dollar terms, remittance inflows increased 29.0 percent to 6.16 billion in the review period. Such inflow had increased 3.4 percent in the same period of the previous year. Net secondary income (net transfer) reached Rs.954.78 billion in the review period. Such income was Rs.700.43 billion in the same period of the previous year.
The number of Nepali workers, both institutional and individual, taking first-time approval for foreign employment stands at 175,591 and taking approval for renew entry stands at 163,924. In the same period of the previous year, such numbers were 190,384 and 135,425 respectively.
Current Account and Balance of Payments
The current account remained at a surplus of Rs. 358.83 billion in the review period. Such surplus was Rs.158.45 billion in the same period of the previous year. In the US Dollar terms, the current account registered a surplus of 2.54 billion in the review period against a surplus of 1.18 billion in the same period of the previous year.
In the review period, net capital transfer amounted to Rs.7.06 billion. In the same period of the previous year, such transfer amounted to Rs.3.50 billion. Similarly, in the review period, Rs.7.47 billion foreign direct investment (equity only) was received. In the same period of the previous year, foreign direct investment inflow (equity only) amounted to Rs.6.03 billion.
Balance of Payments (BOP) remained at a surplus of Rs.421.89 billion in the review period. Such surplus was Rs.225.34 billion in the previous year. In the US Dollar terms, the BOP remained at a surplus of Rs.2.98 billion in the review period compared to a surplus of Rs. 1.68 billion in the same period of the previous year.
Foreign Exchange Reserves
Gross foreign exchange reserves increased 19.6 percent to Rs.3201.47 billion in mid-December 2025 from Rs.2677.68 billion in mid-July 2025. In the US dollar terms, the gross foreign exchange reserves increased 13.5 percent to 22.13 billion in mid-December 2025 from 19.50 billion in mid-July 2025.
Of the total foreign exchange reserves, the reserves held by NRB increased 18.7 percent to Rs.2866.47 billion in mid-December 2025 from Rs. 2414.64 billion in mid-July 2025. Reserves held by banks and financial institutions (except NRB) increased 27.4 percent to Rs.335 billion in mid-December 2025 from Rs.263.04 billion in mid-July 2025. The share of Indian currency in total reserves stood at 22.2 percent in mid-December 2025.
Foreign Exchange Adequacy Indicators
Based on the imports of the five months of 2025/26, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 21.7 months, and merchandise and services imports of 18.2 months. The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 52.4 percent, 151.9 percent, and 39.4 percent respectively in mid- December 2025. Such ratios were 43.8 percent, 128.1 percent, and 34.1 percent respectively in mid-July 2025.
Consumer Price Inflation (CPI)
The y-o-y consumer price inflation stood at 1.63 percent in mid-December 2025 compared to 6.05 percent a year ago. Food and beverage inflation decreased 2.05 percent whereas non-food and service inflation stood at 3.75 percent in the review month. During the same period in the previous year, the price indices of these groups had increased 9.99 percent and 3.92 percent, respectively.
The average inflation stood at 1.55 percent in the fifth month of the current fiscal year compared to 4.89 percent a year ago. Under the food and beverage category, y-o-y price index of ghee & oil sub-category increased 5.52 percent, non-alcoholic drinks 3.56 percent, milk products & eggs 2.44 percent while y-o-y price index of vegetable sub-category decreased 8.54 percent, spices 8.43 percent, pulses & legumes 5.79 percent.
Under the non-food and services category, y-o-y price index of miscellaneous goods & services sub-category increased 18.56 percent, education 7.56 percent, clothes and footwear 5.29 percent, tobacco products 4.15 percent, and alcoholic drinks 3.85 percent while y-o-y price index of insurance & financial services sub-category decreased 0.23 percent. During the review month, y-o-y price index in rural areas increased 1.09 percent, while in urban areas, it rose 1.83 percent.
Merchandise Trade
During the five months of 2025/26, merchandise exports increased 58.2 percent to Rs.116.51 billion compared to a growth of 16.5 percent in the same period of the previous year. Destination-wise, exports to India and other countries increased 82.7 percent and 5.5 percent respectively whereas exports to China decreased 73.3 percent. Exports of soyabean oil, cardamom, palm oil, jute goods, and shoes and sandals among others increased whereas exports of zinc sheet, particle board, tea, woolen carpet and handicraft goods among others decreased in the review period.
During the five months of 2025/26, mercandise imports increased 15.8 percent to Rs.766.19 billion compared to a growth of 3.0 percent a year ago. Destination-wise, imports from India, China, and other countries increased 5.7 percent, 24.6 percent, and 40.8 percent respectively. Imports of crude soyabean oil, chemical fertilizer, gold, transport equipment, vehicle and spare parts, and silver among others increased whereas imports of hot rolled sheet in coil, garlic, edible oil, oil seeds and pulses products among others decreased in the review period.
Total trade deficit increased 10.5 percent to Rs.649.68 billion during the five months of 2025/26. Such a deficit had increased 1.5 percent in the corresponding period of the previous year. The export-import ratio increased to 15.2 percent in the review period from 11.1 percent in the corresponding period of the previous year.
During the five months of 2025/26, merchandise imports from India against payment in convertible foreign currency amounted Rs.69.45 billion. Such amount was Rs.72.84 billion in the same period of the previous year.
Composition of Foreign Trade
As per the Broad Economic Categories (BEC), the final consumption goods, intermediate goods, and capital goods accounted for 69.8 percent, 29.6 percent, and 0.6 percent of the total exports respectively in the review period. In the same period of the previous year, the ratio of the final consumption, intermediate, and capital goods remained 55.0 percent, 44.1 percent, and 0.9 percent of total exports respectively.
On the imports side, the share of final consumption, intermediate, and capital goods remained 38.0 percent, 52.9 percent, and 9.1 percent in the review period. Such ratios were 42.5 percent, 48.8 percent, and 8.7 percent respectively in the same period of the previous year.
Price of Oil and Gold
The price of oil (Crude Oil Brent) in the international market decreased 17.8 percent to US dollar 61.55 per barrel in mid-December 2025 from US dollar 74.89 per barrel a year ago. The price of gold increased 62.3 percent to US dollar 4315.85 per ounce in mid-December 2025 from US dollar 2659.05 per ounce a year ago.
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