Nepalese Economy: How is it faring against COVID-19 pandemic?

CoronaVirus pandemic outbreak is having a massive impact on the world economy. As the Virus spreads across numerous countries of Europe, Asia, and America, the global economy is plummeting. Global Gross Domestic production has fallen to 2.4%, investment in China fell by around 25%, Global oil prices fell to below $30 per barrel and stock markets are falling all around.

The Nepalese economy is also facing some major drawbacks. As few cases of positive CoronaVirus were identified, the government took decisions for lockdown in attempts to control the spread of this virus. This has affected various sectors including tourism, manufacturing, transport, and others.

Tourism Sector

Tourism along with remittance and agriculture has been a major contributor to the Nepalese Economy. As 2020 was announced as tourism year with the slogan “Visit Nepal 2020”, its contribution was expected to increase further. But, with the spread of coronavirus, various travel restrictions have been implemented and the occupancy rate at hotels has gone down drastically. Even though it is tourist season, hotels at major hubs like Thamel, Pokhara and even Mount Everest Basecamp are facing a lack of bookings. Needless to say, if the situation continues as it is, tourism will not be contributing significantly to the country’s GDP this year.

Manufacturing Sector

Nepal relies heavily on China and India for the import of raw materials. Owing to the ongoing scenario, the import of raw materials from China whether it be in the pharmaceutical sectors or the packaging sector has decreased drastically. This is surely going to have a negative impact on Nepal’s manufacturing sector.

Remittance

As mentioned earlier, remittance is one of the major contributors to the Nepalese economy. In the year 2018/19 alone, Nepal received NPR 784 billion in remittance. But, the spread of coronavirus in Gulf countries has led to many Nepalese laborers returning from countries like Dubai and Qatar. Furthermore, around 40,000 Nepalese who were supposed to start their employment in Qatar are now stuck in Nepal. Nepalese Government itself has halted issuing labor permits for now. Thus, the prospect of remittance also doesn’t seem to be favorable in the coming days for Nepal.

Travel Industry

Aviation Industry has taken one of the worst hits. International flights, as well as domestic ones, have been halted. Similarly, local transportation and long route buses have also stopped operation. Airlines companies, travel agents and related businesses are all facing losses.

Besides these, daily wage earners, retail shops, restaurants, and even corporate officers have been cut-off from their earnings.