Nepal Development Update, April 2021 : Harnessing Export Potential for a Green, Inclusive, and Resilient Recovery
Nepal has been hit hard by COVID-19, although the situation has improved more recently. As the outbreak became widespread in mid-2020, a nationwide lockdown was implemented from March to July in 2020, followed by localized lockdowns, including in t...
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| Format: | Report |
| Language: | English |
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World Bank, Kathmandu
2021
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| Online Access: | http://documents.worldbank.org/curated/en/332751617996242148/Nepal-Development-Update-Harnessing-Export-Potential-for-a-Green-Inclusive-and-Resilient-Recovery http://hdl.handle.net/10986/35420 |
| Summary: | Nepal has been hit hard by COVID-19,
although the situation has improved more recently. As the
outbreak became widespread in mid-2020, a nationwide
lockdown was implemented from March to July in 2020,
followed by localized lockdowns, including in the Kathmandu
Valley up until mid-September. During this time
transportation, education and tourism-related activities
were significantly restricted. Since October, the number of
cases has been declining steadily, allowing a gradual easing
of movement restrictions. Nepal launched its vaccination
program on January 27, 2021, and about 5.9 percent of the
population (or 1,791,606 people) were inoculated by
mid-March 2021. Thus, there are good prospects that further
outbreaks of COVID-19 can be contained. After contracting
for the first time in 40 years in FY20 - by 1.9 percent -
the economy showed signs of moderate recovery in the first
half of FY21. Activity resumed in wholesale and retail
trade, transport, and financial services, while favorable
monsoons drove robust agricultural growth. However, tourism
remained at a standstill and private investment anemic given
high levels of overall uncertainty related to the epidemic
as well as political developments. Uncertainty arising from
the epidemic has also contributed to fiscal risks due to the
degree of fiscal stimulus provided to support individuals
and firms and which will need to eventually be rolled back
for fiscal sustainability. Political uncertainty also
heightened in December 2020 when the Prime Minister
dissolved Parliament. The Supreme Court overturned the
decision, reinstating Parliament in February 2021 and
precipitating the split of the two-party majority coalition
in March. |
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