The global coronavirus outbreak is expected to have a significant impact on Nepal’s economic growth, dragging it down to a four-year-low of 2.27 per cent in the current fiscal year.

The government had initially projected economic growth of 8.5 per cent in this fiscal, which ends in mid-July.

As per the National Accounts Estimates unveiled by the Central Bureau of Statistics today, Nepal’s gross domestic product value is expected to grow at the given rate to reach Rs 3.76 trillion.

“Nepal’s economy cannot remain isolated from domestic and global measures adopted to prevent the spread of coronavirus. These projections have been made estimating extreme losses in the hotel, restaurant and international transportation sectors till the end of this fiscal, while other sectors are expected to gradually resume from mid-May,” states CBS.

According to the bureau, the growth of primary sector, which has 28.2 percent weightage in the GDP, is expected to grow at just 2.54 percent in the current fiscal. Primary sector includes agriculture and forestry, fishing and mining and quarrying.

The secondary sector, which has 13.72 weightage in the GDP and includes manufacturing, electricity, gas and water, is expected to grow at 3.76 percent this year.

However, it is the growth of the service sector, which has 58.08 per cent weightage in the GDP that is expected to be badly hit by the coronavirus pandemic. As per CBS estimates, the service sector, which includes hotels, transport, real estate, public administration, education and health, will grow at merely 1.99 percent this fiscal compared to the previous year.

As per the CBS report, the hotel and restaurant, manufacturing and transportation sectors will witness negative growth of 16.3 percent, 1.1 percent and 2.26 percent, respectively, in the current fiscal. Along with the tourism and transportation sectors, the remittance sector is expected to be the worst hit by the pandemic. The bureau has projected that the remittance share of the GDP will fall to 19.01 percent in the current fiscal. It will be the first time that its share has dropped below 20 percent of the GDP since fiscal 2010-11.

Meanwhile, the CBS has projected the country’s per capita income to grow to $1,085 or Rs 127,466 this fiscal from $1,039 or Rs 118,623 in fiscal 2018-19.

A few weeks ago, the World Bank had made sharp adjustments to Nepal’s economic outlook in the wake of coronavirus, downgrading the GDP growth estimate between 1.5 percent and 2.8 percent for the current fiscal. The growth projection of 2.27 percent is still optimistic if compared to the economic impact of border blockade in 2015 which had lasted three months, as per economist Biswo Poudel.

“The closure of businesses for almost three months back then had brought down economic growth to almost 0.7 percent. As the pandemic is expected to hit businesses for a comparatively longer period, the growth projection is very optimistic,” he explained.