Growth projection lowered citing longer than anticipated period to contain coronavirus
KATHMANDU, Sept 15: The Asian Development Bank (ADB) has projected Nepal’s economic growth rate to slump to 1.5 per cent in the current fiscal year 2020/21, citing a longer than anticipated period to contain coronavirus.
Releasing the Asian Development Outlook 2020 Update on Tuesday, the Manila-based regional development bank said that Nepal’s GDP is expected to grow by 1.5 percent in 2021.
ADB has sharply lowered the growth forecast of Nepal by 1.6 percentage points from a growth projection of 3.1 percent in its Asian Development Outlook Supplement in June.
“Growth for FY2021 is revised below the ADO Supplement forecast primarily due to a longer than anticipated period to contain COVID-19 and because India, Nepal’s predominate trade partner, is forecast to contract sharply in a fiscal year that coincides with three quarters of FY2021,” reads the recent Asian Development Outlook.
While the major advanced economies may see a rebound with an ease of containment measures over time, the ADB sees a little chance of a boost to growth in Nepal.
Nepal’s economic growth forecast is the lowest in South Asia. While the ADO projects Maldives’ economy to grow by the highest 10.5 percent and India’s by 8 percent, the economy of Nepal and Afghanistan will be the lowest with 1.5 percent, according to the ADO.
The projection is far below the government’s target to achieve seven percent of economic growth in the current fiscal year.