The Dashain festival, when revellers go on a spending spree, will be here in a month, and merchants have started stocking up for the busiest time of the year.

But the shopkeepers are not terribly excited about a sales boom during the festive season.

“It has been nearly two years since the market has shown little fervour during the festive season,” said Kumar Karki, president of the Federation of National Traders Nepal. “This year too we are not expecting bumper festive sales.”

Experts say businesses large and small face declines in sales and profits during economic slowdowns.

Despite the gradual easing of import trade across the northern border, traders are bringing fewer shipments from China than during pre-Covid times.

This year, Dashain begins on October 15.

Economists say the country’s economic activities expand greatly in September and October due to the occurrence of two major festivals Dashain and Tihar which a majority of Nepalis from different communities celebrate.

There is no authentic data, but economists say that 40-70 percent of market activities take place during Dashain, Tihar and Chhath.

"In view of the market situation, traders have placed fewer orders for readymade garments, bags and accessories," said Karki.

“The main factor for pushing customers away is an increase in the price of goods and a decline in people’s spending capacity.”

High bank interest, inflation, weaker currency, less demand and consumption of goods, and less capital spending by the government have been causing an economic slowdown in the country.

The supply of imported goods is smooth, and shipments have started arriving in the market, traders said.

Traders are not hopeful about Dashain sales as the price of all goods, including food items, have skyrocketed. Traders say that rentals too have gone up.

“As inflation has been biting globally, the price of imported goods has increased moderately,” said Ashok Kumar Shrestha, president of the Nepal Trans Himalayan Border Commerce Association.

“I cannot say now how high prices will increase. But they will be higher by a few percentage points compared to last year,” he said.

"Most traders are routing their imports via the Tatopani border point this year following the relaxation of travel restrictions," Shrestha said.

Sellers of mobile sets and consumer electronics are hopeful about better festive sales this year. Domestic dealers say that consumers are waiting for festive sales offers in mobiles and consumer electronic goods this year.

"The dealers are introducing festive themes for festive sales, especially for Dashain," said Bharat Bhattarai, president of the Federation of Nepal Mobile Traders.

“The implementation of the mobile device management system is expected to increase sales as people coming from abroad will not be bringing many mobile sets like before,” he said.

"The market is down, but the response to festive sales from customers has been good so far. The mood in the mobile market this festive season is like during pre-pandemic times,” he said.

Mobile dealers say that their shipments of cell phones for the festive season are en route and have not yet arrived. All mobile imports come from China and there are no hassles at the border points this year, they said.

“The economic situation is definitely not positive, and it is going to impact festive sales. But we are hopeful that sales will be satisfactory,” said Bishnu Gyawali, deputy general manager of CG Electronics.

"The company is introducing a festival scheme which is expected to boost sales," said Gyawali. “We are expecting good sales of TVs and refrigerators during Dashain and Tihar this year,” he said.

The automobile sector that faced a seven-month import ban last year is also expecting good business during the festive season this year.

“The situation is not positive for car sales due to high interest rates and complex bank financing, but we are hoping for business worth Rs20 billion during the festive season this year,” Sunil Rijal, vice-president of the Nepal Automobile Dealers’ Association (NADA).

"The NADA auto show is making a comeback after four years, and it will help to increase sales, but business will not be like before the pandemic," he said.

"Sales of electric vehicles are expected to grow faster than gasoline-powered four-wheelers. Vehicles with small engine capacities are expected to sell very well," Rijal said.