Kathmandu: As Nepal transitions from 2082 to 2083, the past year stands out as one of the most turbulent and defining periods for the country’s economy. Marked by economic slowdown, political instability, high inflation, and policy uncertainty, 2082 is likely to have long-lasting effects on Nepal’s economic trajectory.

A Year of Political Shock and Economic Fallout
The year was dominated by the impact of the ‘Genji Movement,’ a major uprising against corruption that reshaped Nepal’s political landscape. The movement led to the fall of the government led by KP Sharma Oli and triggered a dramatic shift in power.

However, the protests also caused widespread destruction. Key state institutions—including Singha Durbar, the Parliament building, and the Supreme Court—along with private sector assets, were vandalized or set on fire. This severely damaged investor confidence.

The immediate economic impact was visible in the stock market, which hit a “negative circuit” on the first trading day after the unrest, reflecting deep uncertainty and fear.

Private Sector Under Pressure
The economic slowdown hit the private sector hardest. Construction, real estate, and industrial activities declined sharply, leading to reduced demand for bank loans. While this improved liquidity in the banking system, it significantly hindered investment growth.

The real estate sector faced a major crisis due to delays in land classification under new land-use regulations. Transactions nearly stalled nationwide, further worsened by the destruction of over two dozen land revenue offices during the Bhadra 24 protests.

Even after regulatory amendments and reopening of land transactions, recovery remained weak. A 17.17% drop in real estate revenue in Falgun compared to Magh highlighted the continued downturn.

Stock Market Volatility
The stock market experienced extreme fluctuations throughout the year. Policy changes by the Securities Board of Nepal—including restrictions on IPO issuance for hydropower companies—created uncertainty among investors.

Further disruptions, such as the proposed ISIN changes and a prolonged “pen-down” protest by regulatory staff, halted the primary market for nearly 45 days, delaying securities issuance worth over Rs 80 billion.

Political developments also influenced market sentiment. The formation of a new government and discussions around leadership by Balendra Shah briefly boosted confidence. However, renewed crackdowns on financial irregularities by Home Minister Sudhan Gurung later contributed to another downturn.

Inflation and Global Pressures
Rising global energy prices significantly impacted Nepal. A 45.8% increase in crude oil prices, along with disruptions in global supply chains due to geopolitical tensions in West Asia, pushed domestic fuel prices to record highs.

Petrol reached Rs 219 per liter, while diesel surged, increasing transportation and production costs and driving overall inflation. Similarly, gold prices soared by nearly 70%, reaching around Rs 300,000 per tola, dampening market activity.

Mixed Signals in Energy and Trade
While there were some positive developments—such as agreements for cross-border electricity transmission with India and export deals with Bangladesh—policy uncertainty persisted. The government’s introduction of a “take and pay” system created skepticism among hydropower investors.

Challenges Ahead for 2083

As Nepal enters 2083, the new government faces significant challenges:
-Restoring confidence in the private sector
-Increasing capital expenditure
-Stabilizing inflation
-Ensuring policy clarity and consistency

The direction of the economy will largely depend on how effectively the leadership of Prime Minister Balendra Shah and the governance initiatives of Home Minister Sudhan Gurung translate into structural reforms and investor confidence.

Overall, 2082 will be remembered as a year where political upheaval and economic stress went hand in hand—testing the resilience of Nepal’s economy and setting the stage for critical reforms ahead.