KATHMANDU: The World Bank has estimated that Nepal’s economic growth rate will shrink to 1.5 to 2.8 percent this year due to the coronavirus pandemic.
Some six months ago, the World Bank has estimated Nepal’s economy to grow by 6.5 percent. The new forecast comes in the wake of the impact created by the outbreak of a pandemic.
Released today, the latest South Asia Economic Focus anticipates a sharp economic slump in each of the region’s eight countries, caused by halting economic activity, collapsing trade, and greater stress in the financial and banking sectors.
In Nepal, growth is expected to fall to a range between 1.5 and 2.8 percent in FY20 reflecting lower remittances, trade and tourism, and broader disruptions caused by the COVID-19 outbreak.
A prolonged outbreak of COVID-19 would impact growth significantly with a further deceleration or contraction in services and industrial production.
Economic growth during FY21 is also likely to remain subdued due to the lingering effects of the pandemic with some recovery expected in FY22.
Earlier, the Asian Development Bank (ADB) had forecast that Nepal’s economy is projected to slow down to 5.3 percent in the current fiscal year.
The economic growth rate stood at around 7.1 percent last year owing to high agricultural yields, a rise in tourists’ arrival and increment in remittance flow as well as spurt in the investment from the private sector.
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