Kathmandu, Mar 4 (EFE).- Nepal’s economy has registered negative growth for the first time in nearly 40 years mainly due to the Covid-19 pandemic, according to a government survey released on Thursday.
The pandemic and the subsequent lockdown have severely impacted Nepal’s service industry, especially tourism, while small and medium enterprises suffered a deadly blow, causing unprecedented job losses.
The growth plunged 15.4 percent in the fourth quarter of 2019-20 that ended mid-July, recording a year-on-year negative growth rate of 1.99 percent, the Central Bureau of Statistics said.
“This is the first annual negative growth rate since 1982-1983 when Nepal’s economic growth rate plunged to 2.97 percent,” Hem Raj Regmi, deputy director-general of the bureau, told EFE.
The negative growth in 1982-83 was due to a severe drought a year ago that caused a severe food crisis in Nepal, said Regmi.
He said the crisis created by the Covid-19 was bigger than the 2015 earthquake that killed nearly 9,000 people and damaged properties worth billions of rupees.
Nepal’s economy recorded zero percent growth that year.
After that, Nepal recorded three consecutive years of substantial economic expansion, with growth averaging 7.3 percent per year.
The statistics bureau said the negative growth rate continued in the first quarter of the current fiscal year 2020-21.
The economic growth rate was projected to contract 4.6 percent due to localized restrictions even though the lockdown imposed on Mar.24 was lifted on July 21 last year.
Pushpa Kandel, the Vice Chairman of the National Planning Commission, told EFE that the government had forecast the economy to grow at 8.5 percent.
“But the lockdown prolonged and caused a severe distress to the economy.”
The global crisis induced by the pandemic dented Nepal’s tourism sector, with arrivals from China dropping by around 70 percent in February 2020.
Tourist arrivals dropped to zero after the issuance of visitor visas was stopped. EFE