Economic Impact of COVID-19 in Nepal: A Question of Bad or Worst

Best Khabar Team | २०७६ फाल्गुन २५ गते आइतबार

–- By Jyoti Koirala/Suman Achraya
Considering the fact and avoid its huge impact on economy, Nepal must take dramatic action to make sure economy is moving through this disaster. There will be the impact of 8 to 10 percent of GDP in this FY 2020 if this lock down continue for 2 to 3 months. Government must make extra fund available for banks to lend to companies it is because business is already taking hit and nobody knows how bad it will hit but this is confirm that it depends on long this spread lasts.

It is due to cost of isolation which will be higher and more dependable for each country. Protecting measures of governmental and non-governmental are severely affecting the economic activities. There is high impact on GDP but this impact is directly related to number of days the lockdown will be there. Extending the days for lockdown means extending the adverse impact on economy.

Although global economy is projected contract by -3 percent in 2020, in reality, just projection and indices will not solve the issue, GDP forecast for bad or worst itself is dubious prediction of international financial institutions, businessmen, economist, media.

What is confirm is that the impact will be much higher in Asian country and more in Nepal due to landlocked, open boarder and remittance based economy. In the recovery process, primary sector is necessary to mobilize well so that secondary and tertiary sector of the economy can get the opportunity of expansion and resource mobilization.

(Koirala is associated with Tribhuvan University – Kathford International College of Engineering and Management and Achraya is associated with Nepal Rastra Bank, Tribhuvan University and National Law College As well. This article is based on the papers dot ssrn)