Impact of Covid 19 on GDP Growth Rate

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By Dr. Binay Mishra (

As known, the country scrambles with continued attenuation of cases, began with a single Wuhan returnee student’s case earlier on 23rd January. Lockdown –was imposed country wide on 24rd March, now eased services, open with some restrain from 15th June has now extended till 22nd July 2020 with suspension of flights till 21st July. But, as projected (Ministry of Health) by mid-July cases could go up to 40,000, disrupting supply chain, threatening small & informal businesses, three of five being jobless, increased suicides and farmers without fertilizer. Financially, some 800,000 migrant workers returnee from Middle East and India (which contributed 1/3 in GDP of Fiscal Year 2018-19), would hit further the already unstable economy of Nepal. On 29 June, the procedure relating to the repatriation of migrant workers using the Foreign Employment Welfare Fund was adopted by the Cabinet decision. Reportedly, around 500,000 seasonal migrant workers from highly food insecure and poor communities have returned from India and are in urgent need of immediate employment and income to support their livelihoods. Further, June-August is traditionally the agricultural lean season, leading to increased risk of food insecurity. 

EconomiesGDP Growth Rate (%) at purchaser prices
FY 2075-76 *RFY 2076-77 *P
Province One 7.43.41
Province Two8.122.28
Province Five6.782

As estimated provincial economies are about to drop due to Covid pandemic caused country wide lockdown leading to disrupted economic activities and labor repatriation, transportation & aviation sector coming to standstill, tourism, hospitality and manufacturing activities being halted.

Bagmati Province with the largest share in national economy among all the provinces is going to have the slowest growth rate (1.23%) in the current financial year as against its 6.4 per cent of growth rate during last year. Such drastic decline in the GDP growth rate has also been estimated for other provincial economies of Five (at 2 %), province two and Gandaki at 2.28 and 2.68 per cent respectively in the current financial year 2076-77. Province Two recorded to have the highest GDP growth rate during last financial year-2075-76. However, Suderpaschim is likely to sustain the highest growth rate among all provinces with 4.08 percent even during Covid stricken current financial year. With this inevitable slow growth rate, the national growth rate is also estimated to decline drastically due to cumulative decline of provincial growth rate.