Dashain and Tihar are Nepal’s most vibrant festive seasons. They carry immense cultural significance and play a crucial role in boosting the economy. Nepal’s economy greatly revolves around these festivals. These major festival celebrations drive consumer spending, generate seasonal employment and sustain local industries.
During Dashain and Tihar, consumer spending surges drastically. Heads of households distribute money to family members, employees receive bonuses and farmers harvest their crops. According to reports, nearly NPR 200 billion, with an average per-person expenditure of around NPR 6,000, is spent nationwide during Dashain. This accounts for about 20% of Nepal’s total national consumption during the period, reflecting a massive spike in consumer demand. Remittance inflow is also at its peak, as migrant workers send money home, boosting households’ purchasing power. Economic data from Nepal Rastra Bank for the three months ending mid-October 2024/25 shows that remittance inflows surged by 11.5 percent in NPR terms, further fueling demand for goods, services and agricultural products during the festival season.
This period significantly benefits sectors like food, clothing, jewellery, flowers and gifts. Local producers, artisans and retailers thrive. The agricultural sector also experiences growth due to increased demand for meat, fruits and vegetables. Kathmandu Valley alone is estimated to have consumed 50,000 to 55,000 goats during Dashain 2023. In Tihar, flowers such as marigold (sayapatri), globe amaranth (makhamali) and chrysanthemum (godavari) remain essential for celebrations. According to a Kathmandu Post report, flowers worth Rs 20 million are sold in Pokhara alone during Tihar. Festivals stimulate the economy by creating temporary but substantial commercial activity, offering opportunities for small vendors to sell food, flowers and other items.
Marketplaces fill with crowds purchasing not only livestock and food grains but also expensive imported goods. According to Customs Office data, mobile phones worth approximately Rs 15 billion were imported during Dashain alone. Reports estimate that Nepal imports apparel worth around Rs 5 trillion annually. Similarly, Customs Office statistics indicate that Nepal imports rice worth around Rs 5 billion during Dashain. Festival sales contribute roughly 20% to 40% of annual retail turnover in Nepal, similar to Diwali spending in India, which drives a significant portion of yearly retail sales and boosts sectors like gold, clothing and food.
Transportation and logistics also feel the surge as millions travel from cities to their hometowns for celebrations. In Kathmandu alone, more than 2.5 million people leave the city during Dashain, creating a large market for travel and transport services. During the festive season, various income opportunities and jobs support rural livelihoods and promote local industries. Some economists estimate that 40% to 70% of market activities occur around these key festivals, highlighting their importance to local economies.
However, despite the temporary economic boost, challenges persist. Nepal faces shortages of domestically produced goods and services, increasing reliance on imports. For instance, according to Department of Customs data, Nepal imported mobile phones worth Rs 10.36 billion from mid-July to mid-September 2021. Infrastructure constraints, such as long queues for public bus tickets, also create significant inconvenience for travellers.
Festival opportunities have not yet transformed into lasting growth. The government can implement policies that incentivise local businesses, streamline logistics and develop sustainable infrastructure. For example, tax subsidies on locally produced decorative lights could encourage domestic production and reduce imports, while improved infrastructure can enhance supply chains and transportation.
Festival seasons generate major economic surges, and with strategic planning, they can be transformed into drivers of sustainable economic growth. By utilising increased consumption, demand and remittance flows through policies that encourage local production, Nepal can reduce its dependency on imports. Addressing supply-side challenges and promoting business-friendly policies will better boost Nepal’s economy.
✍🏻 Pramila Rai