Kathmandu, Sept 15: The Asian Development Bank (ADB) has projected Nepal’s economy to grow by 1.5 percent in FY 2021.
As the COVID-19 pandemic continues to disrupt global economic activity, developing Asia’s gross domestic product is now expected to contract by 0.7 percent in in 2020 while GDP is projected to grow by 6.8 percent in 2021, as per the Asian Development Outlook 2020 Update released by ADB.
“The threat of a prolonged COVID-19 pandemic and a return to more stringent containment measures is the main risk to the outlook. While economies in developing Asia remain resilient, continued policy support is needed to underpin recovery,” said ADB.
As per ADB, Nepal’s economy is faltering after strong growth in recent years under measures to contain COVID-19, declining exports, remittances and tourist income, and pervasive uncertainty. Preliminary estimates show GDP growth in fiscal year 2020 fell well below the ADO 2020 forecast as exports slowed, government spending weakened, and stringent and prolonged containment measures crimped activities.
“Growth for FY 2021 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 3 quarters of FY 2021. Containment measures may ease over time, and the
major advanced economies may rebound in 2021, but with little boost to growth in Nepal,” said ADB.