KATHMANDU, March 4 (Xinhua) -- Nepal's economy contracted for the first time in the last fiscal year 2019-20 in nearly four decades due to the slumped economic activities amid lockdown imposed to prevent the spread of COVID-19, a government agency said on Thursday.
The Central Bureau of Statistics (CBS), the central statistics body of the Nepali government, said its revised estimate showed that Nepali economy contracted by 1.99 percent in fiscal year 2019-20 that ended in mid-July last year.
Last time Nepal's had witnessed negative growth was in the fiscal year 1982-83. According to the World Bank statistics, Nepal had witnessed negative growth of 2.98 percent in that fiscal year.
Director at the CBS Ganesh Prasad Acharya told Xinhua on Thursday that the impact of COVID-19 remained severe which could be explained from the fact that the country had never suffered negative growth in nearly four decades.
"The country's economy had not witnessed negative growth even during decade conflict (1996-2006) and when devastating the earthquake in 2015 hit the country," he said. Nepal's civil war ended in 2006 after a peace accord signed between the Nepali government and then rebels-Nepal Communist Party (Maoist).
In April last year, the CBS had estimated that the Himalayan country's economy would grow by 2.27 percent in the last fiscal 2019-20 despite the spreading pandemic.
The CBS said the estimate made last year was based on the assumption that except the hotels and restaurants and international transportation, all other sectors of the economy would return to normalcy by June 2020.
But most sectors of the economy could not return to normalcy as expected and the lockdown imposed by the Nepali government was also prolonged till July 21 last year, which resulted in contraction of the economy. The government had imposed a nationwide lockdown on March 24 last year.
Acharya said the impact of COVID-19 on the economy remained more severe than what was estimated previously. "Instead of slowing down, the COVID-19 pandemic spread across the country in the final quarter of the last fiscal year affecting economic activities badly," he said.
As per the revised estimate, output of the housing and hospitality sector witnessed a 25.7-percent slump in the last fiscal year followed by transportation and storage with 13.4 percent, and wholesale and retails as well as automobile sector with 10.7 percent.
According to the CBS, the country's economy also suffered contraction for two consecutive quarters - the final quarter of the last fiscal year 2019-20 and first quarter of the current fiscal year 2020-21 as per the revised estimate. Contraction of economy for two consecutive quarters is defined as recession.
"We expect to see positive annual economic growth in the current fiscal year as economic activities are growing lately and the ongoing vaccination drive in the country against COVID-19 will help the economy to rebound," Ishwori Prasad Bhandari, another director at the CBS, told Xinhua. Enditem
