Nepal's economy contracted for the first time in forty years in the last fiscal year due to a months-long lockdown to combat COVID-19
Nepal's economy contracted for the first time in forty years in the last fiscal year due to a months-long lockdown to combat COVID-19.
According to the Central Bureau of Statistics, in the fourth quarter of the last fiscal year 2019-20, ending mid-July, the country’s economic growth rate, or output of the gross domestic product, plunged 15.4 percent compared to the same period in 2018-19, which resulted in the year-on-year negative growth rate of 1.99 percent.
This is the first annual negative growth rate since 1982-1983 when Nepal’s economic growth rate plunged to -2.97 percent, according to the World Bank.
The Central Bureau of Statistics, which is the central agency for the collection, consolidation, processing, analysis, publication and dissemination of statistics in Nepal, had then attributed the negative growth rate to a drought in 1980-81 that led to a severe food crisis, according to the Kathmandu Post.
The negative growth rate continued in the first quarter of the current fiscal year 2020-21, officials said.
Nepal had ordered a strict lockdown in March last year due to COVID-19. It completely shut down all economic activity for nearly four months to stop the spread of the virus. Nepal also closed all its peaks to climbers during the high season last year, which further impacted this tourism-dependent economy.
The government began to partially ease restrictions in July, but many sectors like tourism, hotels, transport, and theatres remained closed for a longer duration.
Nepal began its vaccination campaign with AstraZeneca shots gifted by India in January. Officials have said that infections have come down.
Nepal has so far reported over 274,000 cases and 2,778 deaths
“Technically, it’s a recession. When the growth contracts from one quarter to another, the economy is said to be in a recessionary phase,” economist Shankar Sharma, former vice-chairman of National Planning Commission was quoted.
The country’s economic activities contracted for six months or more triggered by a particular event - COVID-19 pandemic – that severely impacted the income, employment and industrial production.”