Covid-19 impact on Nepalese economy

Nepal has a steady growth in its economy. Being a developing country we are moving towards economic growth gradually. The real GDP forecast for Nepal during the fiscal year 2020/2021 is 0.6%. it is not hidden that the recent pandemic has brought a catastrophe in the Nepalese economy. A number of big businesses have also been reported to have shut down let alone the small retail shops. The supply change has been disturbed and the country’s economy is in chaos. 

Nepal being predominately an agricultural country. The dependency on agriculture is high. More than 70% of the population is dependent on agriculture. The contribution of agriculture along with forest and fisheries in total GDP is estimated to be 27.7% in the fiscal year 2019/20.  Agricultural goods are perishable and there is no proper storage system due to which Nepal faced huge loss especially because of lockdown. Due to lockdown imposed, the goods couldn’t be transported and most of them got rotten and waste which lead to the shortage in some part of the country while in other it resulted in a surplus.

Being a mountainous country Nepal has a huge scope for tourism. It is considered to be one of Nepal’s largest industries. It has supported more than 1.05 million jobs with the expectation of providing more than 1.35 million jobs by 2029. ‘Visit Nepal 2020’ this campaign was officially introduced on 1st January which aimed to attract 2 million tourists, generate 2 billion of revenues and create thousands of jobs. But this campaign could not reach its goal because of covid-19. The domestic, as well as international airport, was forced to shut down because of which the inflow of tourists got stopped.

Remittance is also a major source of income for Nepal. A large number of the population is abroad to support their family. Remittance earning about 8$ billion per fiscal year or 26% of GDP, is one of the major sources of foreign earning. About 30% of Nepal’s GDP comes as remittance sends by the Nepalese who are abroad. Because of banks being shut down and no transaction being held, there is a pause in remittance of the country.

The pandemic is faced by all the countries. The world economy has been domed. It has caused irrecoverable losses for Nepal. The unemployment has increased as there has been no work or business cause of Covid-19. Employees are fired because the organization cannot afford to keep them. On the positive side, Work from home has been adopted and schools, colleges also operate through online mediums. This has helped to reduce the spread of covid-19.

The financial organization has been allowed to open following standard protocol. It will take time for the Nepalese economy to rise again and foreign countries have also been helping by providing funds, vaccines, and other health necessities.