KATHMANDU, April 4: The Asian Development Bank (ADB) has projected that Nepal's economy will grow by 5.3% in the current fiscal year 2019/20, down from the growth rate of 7.3% in 2018/19.
In its latest outlook on Friday, ADB lowered its forecast from its earlier projection of 6.3% for several reasons, notably the global outbreak of COVID-19 pandemic. This is the first projection from the international organization that downgraded the growth prospect of Nepal after the outbreak of COVID-19.
The government had set an ambitious target to attain 8.5% of economic growth in the current fiscal year. The downward revision of Nepal's growth rate comes together with a steep cut in the growth projection of other Asian economies.
“The nationwide lock-down imposed from March 24 to April 7 and its subsequent effects mainly on industry and services and potential fall in remittances will undermine growth prospects,” read the Nepal chapter of the outlook.
Lower agricultural output, in particular of rice, which supplies nearly 7% of GDP will also dampen growth prospects, according to the periodic report.
“A late monsoon, flooding in some areas in early July, and pest infestation in others are the main causes. The global outbreak of COVID-19 has dampened mainly services, constricting growth prospects,” it added.