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Hit by lockdown, Nepal cuts growth forecast to lowest in four years

by Reuters
Thursday, 30 April 2020 12:31 GMT

By Gopal Sharma

KATHMANDU, April 30 (Reuters) - Nepal has cut its economic growth forecast for the fiscal year that ends in mid-July to the lowest in four years, saying on Thursday the country had taken a hit from a nationwide lockdown to control the coronavirus outbreak.

Nepal has ordered its 30 million people to stay home under a six-week lockdown due to end next week to curb the spread of the novel coronavirus, a move that has virtually shut down all sectors of the impoverished economy.

The Himalayan nation, a buffer between China and India, has reported 57 cases of the virus and no deaths so far.

The government's Central Bureau of Statistics (CBS) said the economy would grow by 2.27% in the year to July 15, the lowest since 2015/16, because of disruptions. Last year, the economy grew by 6.75%.

The new projection compares with a target of 8.5% set by the government last year.

CBS official Ishwari Prasad Bhandari said the outbreak of the coronavirus and subsequent lockdown had not spared any sector of the $32 billion economy.

A shutdown of the ground and air transport has meant no tourists, hotels and restaurants have closed down, farmers have failed to send their products to markets, he said.

"Sectors like construction, transports, manufacturing and hotels will have negative growth this year," Bhandari told Reuters. Some sectors like health, electricity and gas will nominally grow, he said without giving details.

In March, the government closed all its Himalayan peaks including Mount Everest for climbing because of the coronavirus that causes COVID-19, a move that forced hotels, air and ground travel including trekking to come to a complete halt.

Trekking and mountain climbing are key adventure sports and a major source of income and employment in the cash-strapped nation. (Reporting by Gopal Sharma; Editing by Emelia Sithole-Matarise)

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