June 4, 2020 / 8:35 AM / a month ago

Nepal economy to suffer $1.4 bln hit due to coronavirus- cbank official

KATHMANDU, June 4 (Reuters) - Nepal’s economy is expected to suffer a hit of over $1 billion due to coronavirus containment measures which have hurt business activity and tourism in the Himalayan nation, a central bank official said on Thursday. The shutdown is expected to have knocked some 168 billion Nepali rupees ($1.4 billion) off Nepal’s gross domestic product in the current fiscal year ending mid-July, the official told Reuters. The country, wedged between China and India, has been under a lockdown since March, when two cases were reported. Confirmed coronavirus cases have since risen to 2,300 with nine fatalities, and officials say the peak could be months away. “These are our estimates of losses to national production only for this year due to COVID-19,” said Chinta Mani Siwakoti, a deputy governor at the Nepal Rastra Bank, the country’s central bank. The new financial year starts on July 16. Only last month, the government lowered its growth forecast for the year to 2.3% from 8.5% due to the health crisis. Siwakoti said hotels and restaurants, which were the hardest hit by the lockdown, would be slower to recover because tourists would be restrained for some time even after the pandemic.

“The extent of total economic loss depends on how long the lockdown continues and how soon economic activities revive,” said Siwakoti. A central bank panel is studying the impact of the pandemic on the $32 billion economy, he added.

The lockdown is in place until June 14, but Prime Minister K.P. Sharma Oli is under pressure from politicians, business groups and the public to re-open the economy before then.

Some businesses have vowed to defy restrictions and open from Thursday. About 20 percent of Nepal’s 30 million population is poor and heavily dependent on the informal sector.

US $1=120.74 Nepali rupees Reporting by Gopal Sharma Editing by Alexandra Ulmer and Ana Nicolaci da Costa

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