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Nepal Development Update : Post-Pandemic Nepal - Charting a Resilient Recovery and Future Growth Directions (English)

The global COVID-19 (Coronavirus) pandemic imposed both a supply and a demand shock on Nepal’s economy, which adversely affected growth. The global crisis induced by the pandemic initially impacted Nepal through the tourism sector, with arrivals from China dropping by around 70 percent in February and a full stop to the issuance of visitor visas taking effect in early March 2020, which has effectively dropped tourist arrivals to zero. The impacts of the pandemic did not remain limited to tourism. On March 21, the Government of Nepal announced a nationwide lockdown, which affected industrial and agricultural production, leading, for instance, to more than a 25 percentage point decline in capacity utilization of industry by early June 2020 and a 64.7 percent (y/y) drop in credit provision to the private sector during the two-month lockdown period. Demand for consumption and production products, such as diesel and petrol, slowed, with many Nepalese experiencing job losses or the inability to outmigrate due to widespread travel restrictions. A domestic outbreak of COVID-19 commenced in May, prolonging the lockdown and imposing substantial human and further economic costs. As a result of the impact of COVID-19, GDP growth in Nepal is estimated at 1.8 percent in FY2020, compared to 7 percent in FY2019. Growth in the service sector is now estimated at 1 percent, the lowest since FY2002, while growth in the industrial sector is estimated at 3.2 percent, a four-year low, due to the deceleration in overall growth.


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    Ezemenari,Kenechukwu Maria, Joshi,Nayan Krishna, Blum,Florian Michael

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    Working Paper

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    South Asia,

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    Nepal Development Update : Post-Pandemic Nepal - Charting a Resilient Recovery and Future Growth Directions

  • Keywords

    small and medium size enterprise; real effective exchange rate; resilient recovery; value-added tax; food price; liquidity support to bank; Technical and Vocational Education; investment in government security; public sector commercial bank; percentage point decline; advance payment of tax; access to the internet; merchandise export; private sector credit; current account deficit; financial sector stability; finance company; Foreign Exchange Reserve; private sector contract; short-term interest rate; inflation; tourism sector; remittance on growth; lending rate; loanable fund; budget execution rate; source of financing; Social Safety Nets; sanitation and hygiene; long term deposit; major trading partners; essential health services; domestic credit market; management of health; Private Sector Growth; access to finance; real estate loan; Health Service Delivery; international tourist arrivals; expansionary fiscal policy; banking sector liquidity; emergency response plan; demand for consumption; payment of salary; social protection system; net liquid asset; foreign direct investment; Solid Waste Management; lack of availability; number of beneficiaries; private sector representative; water pollution control; improved service delivery; net foreign asset; loss of livelihood; increase tax revenue; trade and investment; imports of consumption; private commercial bank; electronic payment system; public employment program; emergency education; public works program; movement of good; commercial bank branch; trade in goods; low oil price; Agriculture; credit provision; monetary policy; agriculture sector; concessional loan; financial service; indian rupee; mobile banking; banking system; weighted average; Migration Policies; productive sector; green growth; regulatory requirement; fiscal incentive; foreign currency; industrial sector; green investment; soybean oil; private consumption; export ban; vegetable price; fiscal measure; Non-PO Request for Payment; Digital Literacy; school sanitation; baseline scenario; Public Services; agricultural production; capacity utilization; goods export; Education Services; labor migrants; construction material; pandemic preparedness; regulatory measure; financial sustainability; economic recovery; migrant worker; government revenue; minimum requirement; informal sector; support measure; merchandise import; tax payment; job loss; construction work; health measures; target range; insurance policy; physical infrastructure; new business; nonperforming loan; migrant destinations; international airport; resilient infrastructure; managing debt; hotel sector; airline industry; budget speech; public servant; prices increase; aggregate import; consumption good; increased demand; financial infrastructure; lost jobs; debt sustainability; daily data; petrol consumption; medical support; food relief; removing barriers; return migrant; daily wage; domestic airline; unemployed worker; vulnerable household; outbreak response; Disease Prevention; building system; regulatory capital; business continuity; international arrivals; digital system; aviation fuel; electricity production; demand charge; industrial production; excess supply; child back; construction sector; fertilizer supply; farm labor; utility company; corporate demand; dairy product; license renewal; parking fee; consumer insolvency; food storage; personal deposit; financial health; social interaction; tourism destinations; water quality; court settlement; payment collection; trade disruption; new credit; average inflation; weak demand; investment reforms; investment climate; broadband internet; approval process; excess liquidity; liquidity shortage; cleaner technology; contingent liability; carbon tax; development partner; short-term liquidity; fiscal consolidation; export tax; contingent liabilities; access restrictions; supervisory framework; digital infrastructure; tax policy; budget allocation; social distance; fiscal allocation; financial product



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Ezemenari,Kenechukwu Maria Joshi,Nayan Krishna Blum,Florian Michael

Nepal Development Update : Post-Pandemic Nepal - Charting a Resilient Recovery and Future Growth Directions (English). Washington, D.C. : World Bank Group.