Author Archives: Abhishek Dhital
Author Archives: Abhishek Dhital
With businesses coming to a global halt due to the COVID-19 pandemic, global financial markets are in freefall. The whole world is in lockdown.
According to the Bank of America Global Research, Global GDP growth is likely to be just 2.8% in 2020 which would be the worst year since the financial crisis and the Great Recession ended in 2009.
Altogether, Nepal’s economy is being severely impacted. Although Nepal has not faced severe problems health-wise, its economy is expected to worsen in the coming months. The Asian Development Bank’s ‘COVID-19 Economic Impact Assessment Template’ released the best and worst-case scenarios for countries in the region, which predicts a loss of up to $322 million.
Let’s find out how this soon-to-be global economic crisis will affect the economy of Nepal.
Agriculture remains Nepal’s principal economic activity. Agriculture is the main occupation of around 66% of the population, which provides 36% of GDP.
Nepal Rastra Bank, in its Mid-Term Review of the 2019-20 Monetary Policy, said that the spread of the coronavirus, along with decreased paddy production this year, would hurt the economy and this lockdown is sure to bring more harm.
Nepal’s GDP is heavily dependent on remittance (16.39%) from foreign workers. If industries and businesses operating in the Gulf shut down due to the coronavirus, many Nepali workers will have to face unemployment for some time. Nepal has also stopped issuing labor permits to Nepali migrant workers for the time being.
The tourism sector has been the biggest victim of the Corona Virus. It has been impacted by travel restrictions imposed by Nepal and other countries. The Nepal government has also canceled all climbing expedition permits, including Mt. Everest for the spring season.
The government of Nepal has postponed Visit Nepal 2020 campaign, Sagarmatha Sambad 2020, and other international events until further notice.
The impact of the coronavirus has been most visible in the manufacturing industry, as most raw materials come from China. “Nepal’s pharmaceutical industry is heavily dependent on China for the chemicals used to make medicines,” said Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry.
The construction sector has already been sluggish from the early days of this fiscal year. Nepal imports a significant quantity of hardware used in buildings from China and hardware traders have said they will be in short supply after a month.
Projects like the Kathmandu-Narayangarh Road Widening Project and the expansion of the Kathmandu Ring Road, various hydropower projects and transmission line projects have been affected as Chinese contractors and workers have not returned.
The deadline for the Gautam Buddha International Airport in Bhairahawa has already been postponed until mid-May from March 31 as vital components like runway lighting, baggage handling and other equipment for the airport terminal are unlikely to be delivered on time.
Hartwig Schafer, World Bank Vice President for the South Asia Region, said, “Declining industrial production and imports, as well as tensions in the financial markets reveal a sharp economic slowdown in South Asia.” With that context in mind, the report remains cautiously optimistic that a slight rebound in investment and private consumption could jumpstart South Asia’s growth up to 6.3 percent in 2020, slightly above East Asia and the Pacific.
In Nepal, GDP growth is projected to average 6.5 percent over this and next fiscal year, backed by strong services and construction activity due to rising tourist arrivals and higher public spending.
The Coronavirus that originated from Wuhan, China, has spread like wildfire. Recent data shows that it has taken the lives of more than 9, 000, and inflecting more than 200,000 people worldwide.
Schools, hostels, restaurants, hotels, and public spaces have been shut down and people are forced to stay inside the house until further notice in almost all parts of the world. The pandemic impacted nearly every industry globally in recent weeks affecting various programs and events around the globe.
Here are some of the significant events that got canceled due to the coronavirus outbreak.
The government and tourism department of Nepal authoritatively reported that Nepal would declare the year 2020 as Visit Nepal 2020. It is a year committed to the tourism industry with a vision of making a reasonable brand picture of Nepal as a travel and vacationer destination. It also focused on backing up the tourism foundations of Nepal, enhancing the growth of the tourism industry, and local tourism as a supportable industry.
Unfortunately, the Nepal Government requested all the travelers to postpone their travel to Nepal until the outbreak of the COVID-19 is controlled.
London Book Fair is a major annual trade fair that draws around 25,000 publishing professionals from around the world. On March 4th, Reed Exhibitions announced that the London Book Fair 2020, scheduled to take place at Olympia, London, from 10 to March 12th, would be canceled following the escalation of COVID-19 Coronavirus in Europe.
They had assured the participants that the fair would continue in 2021.
CERAWeek is an annual energy conference organized by the information and insights company IHS Markit in Houston, Texas. Delegates from over 80 countries were expected to participate in CERAWeek 2020. But on March 1, it was officially canceled, scheduled to take place in Houston on March 9-13.
CERAWeek will continue in Houston on March 1-5, 2021.
The ASEAN Summit is a biannual meeting held by the members of the Association of Southeast Asian Nations concerning the economic, political, security, and socio-cultural development of Southeast Asian countries.
President Donald Trump’s administration has postponed the summit, which was to be held in Las Vegas on March 14th.
Game Developers Conference is the largest developer-facing event in North America, which is only open to industry professionals. The event hosts Game Developers Choice Awards as well as presentations and exhibitions from many of the largest game companies in the world who use it to promote new games, discuss industry-facing events, and share knowledge.
After close consultation with associates in the game development industry and the community around the world, they postponed the Game Developers Conference from March until “later in the summer.”
With the cancellation of several events at Paris Fashion Week, organizers have called off Rakuten Fashion Week in Japan. The fashion events were closed off for the public and were broadcasted live on TV.
His Holiness The Dalai Lama’s personal physician, as well as consultants, have advised a postponement of all public engagement for the time and has canceled all his public engagements until further notice.
The ordination ceremony for monks was rescheduled and the officials said the announcement will be made shortly afterward.
MWC Barcelona is an annual trade show organized by GSMA, dedicated primarily to the mobile communications industry. Altogether about 100,000 people, including device manufacturers, network equipment providers, representatives of wireless carriers, the press, and local people, attend the show every year.
After exhibitors and companies pulling out of MWC, the organizers GSM Association (GSMA), has now canceled the event altogether.
Facebook F8 is an annual conference, intended for developers and entrepreneurs who build products and services around Facebook’s products and services. Facebook decided to cancel the annual meeting in San Jose, California, scheduled for May 5-6.
Facebook had previously canceled its March global marketing summit in San Francisco, also due to coronavirus concerns.
All the major sports organizers around the world such as National Hockey League (NHL), National Collegiate Athletic Association, National Basketball Association (NBA), Major League Baseball (MBL), PGA Tour, Major League Soccer, Union of European Football Associations (UEFA Champions League) and Football Association canceled the upcoming events and games until the Covid-19 is controlled.
Other events, such as the Indian Premier League (IPL) & Everest Premier League (EPL), are also postponed.