Chapter 1 · Week 1 — Reading Nepal's Macroeconomic Data
Reading Nepal's Macroeconomic Data
What NRB publishes every month, the five families of indicators, the fiscal-year traps, and the savings gap that defines the economy.
Nepal Rastra Bank publishes, every month, a workbook of about ninety tables called *Current Macroeconomic and Financial Situation*. It is the single most complete picture of the Nepali economy that exists, it is free, and almost nobody outside the central bank opens it.
Over the next two months you will learn to read all of it.
1.1 The five families
Ninety tables, but only five questions. Table 1 of the release — Selected Macroeconomic Indicators — is the whole economy on one page, and it is organised exactly the way you should think:
┌───────────────────────────────────────────────────────────────────┐
│ A REAL SECTOR Is the country producing more? │
│ GDP, savings, capital formation │
│ Week 1 │
├───────────────────────────────────────────────────────────────────┤
│ B PRICES Is money losing value? │
│ CPI, WPI, salary and wage index │
│ Week 2 │
├───────────────────────────────────────────────────────────────────┤
│ C EXTERNAL SECTOR Can the country pay the outside world? │
│ trade, remittances, BoP, reserves │
│ Weeks 3-4 │
├───────────────────────────────────────────────────────────────────┤
│ D FINANCIAL SECTOR Is credit expanding, and at what price? │
│ money supply, deposits, credit, rates │
│ Weeks 5-6 │
├───────────────────────────────────────────────────────────────────┤
│ E PUBLIC FINANCE Can the government pay its bills? │
│ revenue, expenditure, debt │
│ Week 7 │
└───────────────────────────────────────────────────────────────────┘
Week 8: how all five reach NEPSE1.2 Three things about the calendar that trip everyone up
The fiscal year is not the calendar year. Nepal's fiscal year runs mid-July to mid-July — Shrawan 1 to Ashad end. "2025/26" means mid-July 2025 to mid-July 2026, which is Bikram Sambat 2082/83.
"Eleven months" means up to mid-June. This release stops at the end of Jeth, the eleventh month. It is not a full year, and comparing an eleven-month figure with an annual one is the single most common error in Nepali economic commentary.
THE NEPALI FISCAL YEAR 2025/26 (BS 2082/83)
Shrawan Bhadra Ashoj Kartik Mangsir Poush
├───1────┼──2────┼──3───┼───4───┼────5───┼──6──┤
mid-Jul mid-Jan
Magh Falgun Chaitra Baisakh JETH │ Ashad
├──7───┼───8───┼────9───┼───10───┼──11─┤ 12
THIS │ not yet
RELEASE│ published
mid-Juney-o-y is mid-July to mid-July. The release says so in its own footnote. A "year-on-year" change here compares the same mid-month a year apart, not December to December.
1.3 The headline picture, 2025/26
NEPAL, ELEVEN MONTHS OF 2025/26 (to mid-June 2026) ┌─────────────────────────────────────────────────────────────┐ │ REAL │ │ Real GDP growth (purchasers' price) 3.90 % │ │ Nominal GDP (current price) Rs 6,600.10 bn │ │ │ │ PRICES │ │ CPI y-o-y 2.72 % │ │ │ │ EXTERNAL │ │ Exports Rs 247.57 bn │ │ Imports Rs 1,644.80 bn │ │ Remittances Rs 1,534.16 bn │ │ Balance of payments Rs 491.44 bn │ │ Reserves Rs 2,569.38 bn │ │ │ │ FINANCIAL │ │ Broad money M2 y-o-y 11.96 % │ │ Credit to private sector y-o-y 8.19 % │ │ Base rate 6.09 % │ │ NEPSE index (mid-June) 2,724.03 │ │ │ │ PUBLIC │ │ Outstanding domestic debt Rs 1,272.53 bn │ │ Outstanding external debt Rs 1,382.11 bn │ └─────────────────────────────────────────────────────────────┘
Read those numbers together and one fact leaps out before any analysis:
Imports Rs 1,644.80 bn ████████████████████████████████ Remittances Rs 1,534.16 bn ██████████████████████████████ Exports Rs 247.57 bn ████▉ Nepal imports about 6.6 times what it exports. Remittances are about 6.2 times exports. The country does not pay for its imports by selling goods. It pays for them with the earnings of its people abroad.
That single relationship explains more about Nepal's economy — its exchange rate, its reserves, its inflation, its interest rates and ultimately its stock market — than any other. We will come back to it every week.
1.4 GDP: the three ways to say the same thing
The release quotes GDP three ways, and they are not interchangeable.
┌──────────────────────────────────────────────────────────────┐ │ │ │ GDP AT BASIC PRICE │ │ what producers actually receive │ │ + taxes on products │ │ − subsidies on products │ │ ═════════════════════ │ │ GDP AT PURCHASERS' PRICE │ │ what buyers actually pay ← the headline "GDP growth" │ │ │ │ NOMINAL vs REAL │ │ Nominal = at this year's prices │ │ Real = at a base year's prices, inflation stripped │ │ │ └──────────────────────────────────────────────────────────────┘
Worked example — separating growth from inflation.
2025/26 (preliminary)
Nominal GDP growth 6.50 %
Real GDP growth (purchasers') 3.90 %
────────
Implied deflator (roughly) 2.60 %
Formula: (1 + nominal) = (1 + real) × (1 + deflator)
1.0650 = 1.0390 × (1 + d)
1 + d = 1.0650 / 1.0390 = 1.0250
d = 2.50 %
So of the 6.50% by which the economy grew in rupees,
about 3.90 points was MORE STUFF and about 2.50 points
was HIGHER PRICES.Notice the deflator (~2.5%) sits close to but not on top of CPI inflation (2.72%). They measure different baskets — the deflator covers everything the economy produces, CPI covers what households consume. When someone quotes "the inflation rate", ask which one.
1.5 The savings paradox — and what it tells you
Two lines in the real sector look almost identical and mean completely different things.
Gross DOMESTIC Savings / GDP 9.70 %
Gross NATIONAL Savings / GDP 44.80 %
───────
Gap 35.10 percentage pointsThat gap is the largest single number in the real sector block, and it is almost entirely remittances.
WHY THE TWO SAVINGS RATES DIVERGE
GROSS DOMESTIC SAVINGS
= what is produced INSIDE Nepal, minus what is consumed inside
→ measures the domestic economy's own thrift 9.70%
+
NET INCOME AND TRANSFERS FROM ABROAD
= wages of Nepalis working overseas, sent home
~35 pp
=
GROSS NATIONAL SAVINGS 44.80%
┌────────────────────────────────────────────────────────┐
│ Nepal saves at a rate that would look like an East │
│ Asian tiger economy — but only 9.7 points of it is │
│ generated by production at home. The rest arrives │
│ in an envelope from Qatar, Malaysia and the UAE. │
└────────────────────────────────────────────────────────┘Set that against capital formation:
Gross Capital Formation / GDP 31.90 % Gross Fixed Capital Formation / GDP 26.30 % Gross National Savings / GDP 44.80 % Savings (44.80) EXCEED investment (31.90) by 12.9 points. An economy saving far more than it invests is an economy that cannot find enough productive things to do with its own money. That surplus has to go somewhere — into bank deposits, into land, and into the share market. Hold that thought until Week 8.
1.6 How to actually open the workbook
Practical, because most people give up here.
THE RELEASE, STRUCTURALLY Sheet 1 Selected Macroeconomic Indicators ← start here, always Sheets 2-12 Prices: CPI, WPI, salary and wage Sheets 13-25 Foreign trade, direction, terms of trade Sheets 26-27 Migrant workers, tourist arrivals Sheets 28-33 Balance of payments, reserves, exchange rate Sheets 34-36 Government budgetary operation, revenue, debt Sheets 37-51 Money supply, banking survey, deposits, credit Sheets 52-57 Monetary operations, interest rates, T-bills Sheets 58-63 Share market Sheet 64 Electronic payments Sheet 65 Monthly economic indicators Annex A1-A22 Long historical series for most of the above
Two habits worth building immediately:
Always read the units line. Tables switch between "Rs. in million" and "Rs. in billion" without warning, and between rupees and US dollars. Reserves appear as both Rs 2,569.38 billion *and* USD 18,653.87 million on adjacent rows — the same reserves, two currencies.
Always read the footnotes. They carry the caveats that change the meaning: which figures are preliminary, which are revised, that interest rates are a weighted average of mid-May to mid-June rather than a month-end snapshot.
1.7 A caution about precision
The real-sector figures in this release are marked with a double dollar sign, and the footnote says: *preliminary estimate by National Statistics Office*.
HOW MUCH TO TRUST EACH NUMBER
HARD Reserves, T-bill rates, NEPSE index, deposits
← counted or transacted; little judgement
FIRM Trade values, remittance inflows, government revenue
← recorded at a border post or a bank; some lag
ESTIMATED CPI, WPI, wage index
← real surveys, but of a sample and a fixed basket
MODELLED GDP, savings, capital formation
← preliminary, revised repeatedly, sometimes by a lotNepal's real GDP growth for 2019/20 is printed here as −2.37%. That number was not known in 2020; it was estimated, revised, and settled later. Treat this year's 3.90% the same way: directionally useful, precisely wrong.
Formulas from this week
Nominal growth ≈ real growth + inflation (deflator)
precisely: (1 + nominal) = (1 + real) × (1 + deflator)
GDP deflator = (Nominal GDP / Real GDP) × 100
Savings gap = Gross National Savings/GDP
− Gross Domestic Savings/GDP
≈ net income and transfers from abroad, as % of GDP
Savings-investment balance
= Gross National Savings/GDP
− Gross Capital Formation/GDP
(positive = the country lends abroad on net)What you should be able to do now
- Name the five families of indicators and the question each answers.
- Convert between the Nepali fiscal year, the Bikram Sambat year and the Gregorian calendar, and say what "eleven months" covers.
- Distinguish GDP at basic price from GDP at purchasers' price, and nominal from real.
- Separate a nominal growth rate into real growth and the deflator.
- Explain why Nepal's national savings rate is 35 points above its domestic savings rate, and what that gap is made of.
- Rank the reliability of any figure in the release by how much estimation it required.
Next week: prices — how the CPI is actually built, why food and non-food diverge, and what a wholesale index tells you that a consumer index cannot.
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