Nepal’s economic indicators improve after lockdown relaxation

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KATHMANDU, July 23 (Xinhua) — Some of the economic indicators of the Nepali economy improved as the government gradually started to relax the lockdown since mid-May, statistics of Nepal’s central bank showed.

On July 20, Nepal’s cabinet decided to end the nearly four-month long lockdown by keeping a few restrictions in place. The lockdown was imposed on March 24 suspending almost all the economic activities to prevent the spread of COVID-19 which has so far killed 42 people and infected over 18,000 others in Nepal as of Wednesday, according to Nepal’s Ministry of Health and Population.

According to the central bank’s statistics, the Nepali government’s expenditure, revenue collection, remittance inflow, export and imports and travel income all saw growth during the period from mid-May to mid-June compared to the previous months when the lockdown was imposed. May is the 11th month of last fiscal year 2019-20 which ended on July 16.

“The improved economic indicators reflect increased economic activities in the country after the lockdown was gradually relaxed,” Gunakar Bhatta, spokesperson at the central bank told Xinhua early this week. “After the end of the lockdown, the service sector, which has been hit hard by the pandemic, is expected to contribute to the economy.”

The Nepali government had first decided to relax lockdown for 44 sectors in early May, opened most of the sectors for operation in early June and finally decided to end the lockdown fully on July 20.

These relaxation of the lockdown over the last two months helped the economic activities to pick up, according to Bhatta. According to the Nepali central bank statistics, the Nepali government’s expenditure grew to 1 billion U.S. dollars during mid-May to mid-June, from 715 million U.S. dollars in the previous month.

Likewise, the Nepali government revenue collection also grew to 343 million U.S. dollars in the 11th month of last fiscal 2019-20 compared to 134 million U.S. dollars in the 10th month.

Despite continued globally supply chain disturbance due to the pandemic, Nepal’s exports rose to 49 million U.S. dollars in the 11th month of last fiscal year compared to 28 million U.S. dollars in the 10th month.

Likewise, Nepal’s imports increased to 631 million U.S. dollars in the 11th month of the last fiscal compared to 355 million U.S. dollars in the previous month.

When it comes to the inflow of remittance, the country received remittances amounting to 784 million U.S. dollars in the 11th month compared to 449 million U.S. dollars in the previous month.

“Despite the global impact of the Coronavirus, including in the Gulf nations and Malaysia, there has not been a significant drop in remittance,”Bhatta said. “We hope that Nepal will receive remittances in fiscal 2019-20 close to the amount we received in the previous fiscal year 2018-19.”

In the previous fiscal, Nepal had received remittance amounting to 7.79 million U.S. dollars.

Tourism is the severely hit sector by the pandemic due to the domestic and international travel restrictions. But, Nepal earned 10 million U.S. dollars in the 11th month compared to 7.5 million U.S. dollars in the previous month of last fiscal year. According to Bhatta, the country’s tourism income is largely generated from foreigners who were stranded in Nepal after the lockdown was imposed.

After ending the lockdown, the Nepali government has also decided to reopen the domestic and international flights starting from August 17 which is expected to help recover the tourism sector to some extent.

However, former Nepali Finance Minister Ram Sharan Mahat told Xinhua early this week that improvements in some of the economic indicators are largely guided by circumstances instead of policy made by the Nepali government.

“I don’t see the country will see the marked improvement in economic performance in the short term,” he said. As uncertainty continues, the banks’ lending to the private sector decreased slightly in the 11th month compared to the previous month, according to the central bank.

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