October 9, 2020 | Investopaper
World Bank has released a report stating that Nepal’s economic growth rate will be limited to 0.6 percent in the fiscal year 2077/78 (2020/2021). According to the South Asia Economic Focus Report released on Thursday, Nepal’s economic growth in the fiscal year 2076/77 (2020) is also estimated to be 0.2 percent. The budget statement for the current fiscal year states that Nepal’s economic growth rate will be 7 percent. According to the World Bank, the Corona epidemic and the lockdown are projected to have an unprecedented economic downturn not only in Nepal but also in South Asia.
Maldives is projected to face the most difficulties in 2020. The Gross Domestic Product (GDP) Maldives will be negative at 19.5 percent this year. Similarly, India’s economic growth will be negative 9.6 percent in FY 2021. In 2022, all South Asian countries will reach a state of positive economic growth. The report has projected Maldives to have the highest economic growth that year at 12.5 percent. In 2021, South Asian economic growth is projected at 4.5 percent. Per capita income will also be 6 percent lower than expected. The World Bank’s analysis shows that the impact of Covid could have a long-term effect on the economy.
With about 50 percent of Nepal’s enterprises and businesses in the informal sector, such enterprises and dependent workers are at risk. The report further points out that workers and self-employed families in the informal sector in urban areas are at high risk. It has been pointed out that such informal sector, which is run on the basis of limited savings, should be forced to run its business even in the midst of the risk of infection and this could lead to re-infection.
The World Bank is pursuing a comprehensive and rapid program to protect developing nations from economic stagnation from the effects of the Corona epidemic and has set aside $1.60 billion as grants and soft loans.