Kathmandu, October 8
The World Bank has forecast that Nepal gross domestic product growth rate will be restricted to 0.6 per cent in the current fiscal year 2020/21 that ends in mid-July next year.
In its twice-a-year regional update on the South Asian economy, the bank has also forecast that the economic growth rate will grow to 2.5 per cent next year.
“Nepal’s economy came to a standstill in FY 2020 with negligible growth of 0.2 per cent, a deceleration in the service sector and a contraction in industrial activity due to Covid-19,” the report reads, “Trade disruptions resulted in a collapse in imports and narrowed the current account deficit, but the fiscal balance deteriorated. In the medium term, the economy is expected to recover only gradually as the pandemic-induced disruptions recede.”
Further, the bank has warned, “South Asia is set to plunge into its worst-ever recession as the devastating impacts of Covid-19 on the region’s economies linger on, taking a disproportionate toll on informal workers and pushing millions of South Asians into extreme poverty.”
The bank has suggested governments of the region need to introduce smart policies for informal workers for their economic recovery.
“While the poor have faced rising food prices and suffered severely, the Covid-19 crisis has dealt a further blow to many informal workers in the middle of the income distribution who experienced sharp drops in earnings,” the bank’s press release reads, “The report urges governments to design universal social protection as well as policies that support greater productivity, skills development, and human capital. In that effort, securing international and domestic financing will help governments fund crucial programs to speed up recovery.”