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The price of gold has dropped by Rs 200 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 110, 000 per tola today.

The World Bank has made a downward revision in Nepal’s economic growth prospect in the current fiscal year pointing out that downside risk continues to prevail because of concerns over political stability in the country. In the Nepal Development Update, a biannual country update of Nepal's economy, which was released on Tuesday, the Washington DC-based agency estimated that Nepal’s economy would grow by 4.1 percent in the fiscal year 2022/23 ending mid-July. In October, the bank projected Nepal’s economy to grow by 5.1 percent in the current fiscal year. The latest GDP growth projection of the World Bank for the current fiscal year is the same as the Asian Development Bank. According to the World Bank, slower than the previous forecast was made due to the impacts of import restrictions, monetary policy tightening, higher inflation, and shrinking government expenditure reflecting lower government revenue. Even now, the risks to the outlook are tilted to the downside as no new shocks have been included while making the current forecast of growth considering the increasing frequency of shocks in recent years. The report said that there is a downside risk because of the concerns over political stability in the country. “Local elections in May 2022 and national and provincial elections in November 2022 were followed by successive changes in administration, the most recent being the collapse of the ruling coalition in March 2023,” reads the report. “Political stability remains important to manage the economy and ensure the continued pursuit of development priorities. Political stability may not be achieved in the forecast period.” Besides concern over political stability, higher-than-expected inflation, which will dampen consumption and growth, the possible impacts of likely rotations in government officials, and rising inequality from reduced investments in human capital, especially amongst those yet to recover from unemployment following the pandemic are other factors that could drag the growth down, according to the World Bank. Speaking at an interaction program organized in Kathmandu on Wednesday, Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka said Nepal’s government’s move to adopt fiscal prudence such as import restrictions to address the challenges of the external sector came at a cost. “It has come at the cost of investment to advance the development agenda,” he said, adding, “This is a very delicate balance to strike which is not easy and there are trade-offs." He also talked about tightening monetary policy by hiking the policy rates which slowed credit growth. Though the move was taken to fight inflation, the high-interest rate caused by a raise in policy rate also sowed the investments. Thus, there has been a trade-off,” he said. Post Covid, Nepal had adopted an expansive fiscal and monetary policy that has resulted in a massive trade deficit and a sharp depletion of foreign exchange reserves. In order to stabilize the external sector, the government introduced import control measures and the central bank also hiked policy rates that resulted in higher interest rates for the borrowers. As a result, Nepal’s fiscal revenue and expenditure both decreased. “Amid measures taken to address pressures on the external sector, the Nepali economy has faced the unintended consequences of a slowdown in economic growth and lower fiscal revenue,” said Zervos. According to the World Bank, the import control policy resulted in a steep drop in fiscal revenues and slower growth in the first half of FY 2022/23 as goods imports fell, according to the World Bank. Nepal relies heavily on imports as a tax base, which contributes about half of total tax revenues through VAT, excise, and import duties. “For the first time in five years, Nepal’s fiscal balance was negative in the first half of FY23 at -0.3 percent of GDP as revenues fell across the board while expenditures remained flat,” the report said. “The downturn in revenue growth reflects not only lower imports but more sluggish economic activity as well.” Speaking on the occasion, Finance Secretary Toyam Raya said the situation has been improving along with easing pressure on the external sector of the economy. “Now, we hope revenue collection will gradually improve. There are also positive developments in the economy in this fiscal year in terms of international tourist arrivals, remittance, agriculture production, and hydropower production too,” he said.  

One more motorcycle brand is planning to set up an assembly plant in Nepal. Royal Enfield, the global leader in middleweight motorcycles, has announced plans to set up its assembly operation in the country. Indian news agency Press Trust of India (PTI) has reported that Royal Enfield plans to set up assembly plants in Nepal as well as Bangladesh. The company's CEO B Govindarajan in an interview with PTI said, "The company is in the process of setting up assembly plants in Nepal and Bangladesh as it cannot export its fully built motorcycles from India to these countries due to legal reasons." According to him, the establishment of assembly plants will be carried out through local partners. The local partner of Royal Enfield in Nepal is Triveni Group. The group's subsidiary company Alfa Automotive Pvt Ltd is the official dealer of Royal Enfield in Nepal. Triveni has already registered a company named TG Auto Group Pvt Ltd for motorcycle assembly at the Department of Industry. The group has proposed to invest Rs 380 million for the plant to be established in Jitpur, Bara. The group plans to assemble 8,000 motorcycles annually. As of now, Golchha Group's Hulas Auto Craft has been producing Bajaj motorcycles in Nepal through its assembly plant in Nawalparasi. Similarly, Shankar Group has also started assembling TVS motorcycles in Nepal from its Simara-based plant. After the government incentivized the establishment of automobile assembly plants in the country, Nepali business houses having authorized dealerships of international motorcycle brands have shown their interest in setting up such assembly plants in Nepal. A year ago, the government led by the then Prime Minister Sher Bahadur Deuba through a substitution bill announced a 50 percent excise duty exemption on two-wheelers, four-wheelers, and assembly kits imported by companies to be assembled in Nepal. The government, however, increased the excise duty on 125cc to 250cc two-wheelers by 10 percent while those with engine capacity between 500 cc and 800 cc by 20 percent. This has forced major automobile dealers to set up assembly plants in the country. The authorized dealers of Yamaha, Hero, Honda, and Suzuki motorcycles have also already started the process to set up an assembly plant. MAW Enterprises, the authorized dealer of Yamaha motorcycles in Nepal, has registered MAW Auto Industry to assemble Yamaha two-wheelers. MAW has planned to set up a plant in Tankisinwari, Morang for the purpose. It has proposed to invest Rs 1.51 billion for the assembly plant to assemble 31,000 motorcycles and 19,000 scooters annually. Meanwhile, Syakar Trading, the authorized distributor of the leading Indian motorcycle brand Honda has started the process to set up assembly plants in Nepal. Syakar has registered Himal Moto Pvt Ltd to assemble Honda two-wheelers in Nepal. The assembly plant will be set up in Ward No 4 of Rohini Rural Municipality, Rupandehi. Syakar is said to be investing Rs 600 million in Himal Moto to assemble 25,000 motorcycles and 75,000 scooters annually. Likewise, NGM Pvt Ltd, the authorized distributor of Hero two-wheelers in Nepal, has registered NGM Engineering and Sales Pvt Ltd to assemble Hero motorcycles and scooters. NGM has planned to establish a plant in Ward No 32 of Birgunj Metropolitan City. The company has proposed to invest Rs 330 million in the assembly plant which will produce 45,000 motorcycles annually. Not to be left behind, Vishal Group has entered into the automobile assembly business. The group which is the official dealer of Suzuki motorcycles in Nepal has recently registered Global Automobiles Pvt Ltd for the assembly of motorcycles, scooters, and three-wheelers. The group is investing Rs 464.59 million to set up an assembly plant to produce 30,000 motorcycles and scooters and 5,000 three-wheeled auto rickshaws annually. The assembly plant will be set up in Bindabasini Rural Municipality of Parsa district.

The government has decided to use the Devanagari script on the embossed number plates of vehicles from now onwards. Amending the Vehicle and Transport Management Act, 2049, the government has allowed vehicle owners to choose between Latin script and Devanagari script on embossed number plates. As of now, Latin script is used on embossed number plates. Amid criticism over the use of Latin script, the Ministry of Physical Infrastructure and Transport (MoPIT) initiated the process to use the Devanagari script on the embossed number plates of vehicles. The cabinet meeting on Monday endorsed the proposal of the MoPIT to amend Schedule 2 of the Vehicle and Transport Management Act. Narayan Prasad Bhattarai, Director General of the Department of Transport Management (DoTM) said that now the process of installing embossed number plates in Devanagari script will be started. “With the Cabinet decision, the way has been legally opened to use Devanagari script on embossed number plates,” said Bhattarai. “We will now sign an agreement with the company that has received the contract for installing embossed number plates.” According to MoPIT, further decisions will be taken for making the use of the Devanagari script mandatory or optional on embossed number plates. “For now, the cabinet decision has allowed the use of both Devanagari and Latin scripts on embossed number plates,” said the official. The ministry plans to keep the name of the country and province in the Devanagari script. The contract of installing embossed number plates was given to Decatur-Tiger IT, a Bangladeshi company at $44 million. The DoTM says it will now negotiate with the Bangladeshi company to implement the cabinet decision. The department officials said the cost of the contract will increase now. The department had earlier questioned the contractor company Tiger Decatur IT as to why they could not make embossed number plates in Devanagari script. The company, in response, had said that it was possible but the government should readjust the contract price. The DoTM has been facing criticism for the slow installation of embossed plates as well as costly fees for the installation. The department has installed embossed number plates on around 40,000 vehicles. An embossed number plate is a camera-readable plate that contains a microchip connected to the vehicle’s GPS system. This makes it efficient in terms of maintaining digital records of the vehicles, collecting revenue on time, monitoring vehicles, and controlling vehicle thefts. According to the ministry, it has also advanced the discussion to reduce the fee for embossed number plates. Currently, the DoTM charges Rs 2,500 for two-wheelers Rs 2,900 for three-wheelers, Rs 3,200 for light four-wheelers including cars, jeeps, vans, and tractors and Rs 3,600 for heavy vehicles for installing embossed number plates.