Faris Hadad-Zervos, the World Bank country manager for Nepal, said that the impact of coronavirus pandemic in the global economy is going to be unfortunate for the next few years.

As per the World Bank's projection, the GDP in Nepal is expected to grow between 1.5 to 2.8 percent in the ongoing fiscal year while the growth would be roughly 3 percent in the 2021 fiscal year. It is a big hit for Nepal like in the other parts of the world. Remittance hit will directly affect foreign exchange. Employment and migration, trade and tourism sector will be directly hit in Nepal. We expect that Nepal's inflation will go above six percent in the current fiscal due to the supply shock while both fiscal deficit and the current account deficit are expected to be widened.

In a discussion program organized by the Society of Economic Journalists Nepal (SEJON) through a video conference, he said that Nepal sees a significant drop in GDP growth.

The Society of Economic Journalists Nepal (SEJON) through a video conference today held a discussion program with the World Bank on the impact of coronavirus pandemic in South Asian economies and Nepal. The World Bank country manager for Nepal discussed the dozens of economic journalists.

"The World, South Asia, and Nepal are going to see a significant drop in GDP growth in the ongoing and upcoming few years as per him. Before the pandemic, the GDP in South Asia was expected to grow at 6.3 percent. But as the result of the COVID-19, the region is likely to see GDP growth between 1.8 to 2.8 percent in the 2020 fiscal year, which the worst growth rate in the last 40 years. The GDP growth in South Asia is expected to remain moderate in the 2021 fiscal year at 3.7 to 4.2 percent.

Though Nepal is located between two big neighbors and neighbors themselves have witnessed a reduction in growth, this will also leave an impact on Nepal and its growth.

He said that the recession that the world is going through this coronavirus pandemic is different than others. He said that it is not just recession but a different type of recession. Usually, recessions impact investment and demand for goods. Normally, recessions are demand-driven while the current recession due to coronavirus is supply-driven. “We are currently facing supply-short rather than demand short. Understanding this recession differently will help economies use different new and unique tools to revive the economy and growth. Understanding this panic differently will also help countries to bring out necessary stimulus package in unlocking supply-side constraints,” said the World Bank country manager for Nepal.

As per the World Bank's projection, the GDP in Nepal is expected to grow between 1.5 to 2.8 percent in the ongoing fiscal year while the growth would be roughly 3 percent in the 2021 fiscal year. It is a big hit for Nepal like in the other parts of the world. Remittance hit will directly affect foreign exchange. Employment and migration, trade, and tourism sector will be directly hit in Nepal. We expect that Nepal's inflation will go above six percent in the current fiscal due to the supply shock while both fiscal deficit and the current account deficit are expected to be widened.

The World Bank is working with the government to support Nepal to tackle the pandemic and recover the economy. World Bank believes that a lot has to be done next year on a priority basis. The first priority should be the immediate health response and the government is already doing it. The second is immediate social assistance and jobs. Huge overseas Nepali will be returning home which demands a huge number of jobs.

The Prime Minister Employment Programme and other such programs should be focused on. As it is a supply shock, thirdly we need to focus on the real sector by making sure that production of goods is continued, boosted and small and medium scale industries are focused. Similarly, the supply chain should be made intact. The fourth priority should be macroeconomic stability. As the spending is going to be huge, there needs to be prioritization of spending.

The World Bank is moving 18 percent of its portfolio from our existing portfolio projects towards COVID 19 response."