Global coronavirus job cuts hurt Nepal’s economy

By LIAM BLAND

A recent statement from the International Monetary Fund (IMF) indicates coronavirus cases outside of Nepal may be impacting the country’s economy more than cases in Nepal itself.

Earlier this month, the IMF Executive Board approved a $327m disbursement to Nepal, in response to international travel bans and coronavirus-related job cuts which have stifled the country’s already fragile economic lifelines.

Following the Executive Board’s discussion, IMF Deputy Managing Director and Chair Tao Zhang said Nepal was in desperate need of financial support.

“The global and domestic measures to contain the COVID-19 pandemic are severely affecting the Nepali economy, through their impact on remittances, tourism, and domestic activity,” he said.

According to a World Bank report, nearly 29 per cent of Nepal’s GDP comes from Nepalis working overseas who send money back home, meaning the country has the fifth-most remittance-dependent economy in the world.

Late last month, the World Bank stated global remittances are projected to decline by about 20 percent in 2020 due to COVID-19.

The COVID-19 pandemic has also forced the Nepali government to cancel the Visit Nepal 2020 campaign aimed at attracting more than two million tourists to the country.

The campaign was expected to boost Nepal’s economy by generating an estimated $2 billion in both tourist receipts and thousands of new jobs.

Nepal has recorded 1811 cases and eight deaths from COVID-19.

For more on poverty in Nepal, read Liam Bland’s feature article.

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