Nepal's economy to see meager growth amid COVID-19 impact

Source: Xinhua| 2020-04-30 00:32:37|Editor: huaxia

KATHMANDU, April 29 (Xinhua) -- Nepal's economy is expected to grow by 2.27 percent in the current fiscal year 2019-20 ending in mid-July, a sharp drop from the targeted growth of 8.5 percent as economic activities are interrupted by the COVID-19 pandemic, the central statistics body of Nepal said on Wednesday.

It will be the lowest growth since fiscal year 2015-16 when Nepal's economy grew by just 0.2 percent amid effects of the deadly earthquake in April 2015 and subsequent trade blockade allegedly imposed by India.

After achieving over 6 percent growth for three consecutive fiscal years, Nepal has targeted a growth rate of 8.5 percent this fiscal with the aim to lead the country to a high growth trajectory.

The Central Bureau of Statistics (CBS) said in its annual "National Account Estimates of 2019-20" that it projected the economic growth with the assumption that the measures taken to prevent the spread of COVID-19 domestically and internationally would have an impact on the Nepali economy.

Nepal has been under nationwide lockdown since March 24 as ground and land transportation services have been halted except for supply of essential goods and services, businesses have been closed and industrial and construction activities have also been largely on standstill.

The CBS said in a press statement that its estimate of economic growth was based on the assumption that the hotel and restaurant sector and international transportation services would continue to be severely affected until the end of current fiscal year while other sectors would go towards normalization after mid-May.

The projection of the CBS is in line with that of the World Bank which had projected in one of its latest publications.

Jagadish Chandra Pokharel, a senior Nepali economist told Xinhua on Wednesday that the economic growth projected by the CBS was based on current realities of the COVID-19 in Nepal.

"As the situation is still fluid, growth will depend on whether the country would see spike in COVID-19 cases and how long Nepal has to take strong measures against the deadly disease," he said.

According to the Ministry of Health and Population, Nepal has less than 60 confirmed cases of the COVID-19 so far.

"The economic growth projected by the CBS is the result of lockdown effect," said Pokharel, who is also former vice-chairman of the National Planning Commission, the central planning body of Nepal. "It is still positive because we have not yet seen the full force of COVID-19 effect paralyzing Nepal's weak medical system."

Another economist Govinda Nepal said that the Nepali people might have to take preventive measure for a long period due to the porous border with India where the number of cases has crossed 30,000.

"So, prolonged disturbance in economic activities might have bigger impact on economy than what the CBS assumed," Nepal told Xinhua on Wednesday.

Due to the ongoing lockdown, livelihood of millions of Nepalis, particularly that of daily wage workers, has been severely affected. The economists said the projected low growth has dented Nepal's aim of moving to high growth trajectory.

According to the CBS, Nepal will see contraction in outputs of at least five sectors -- hotels and restaurants; transport, storage and communication; manufacturing; mining and quarrying; and construction. Enditem

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