Covid-19 Pandemic: Impact on Economic health and Quick initiatives for Government of Nepal

COVID-19 has severely affected the world economy resulting in mass unemployment. Hence, remittance inflow in FY 2019/20 is expected to fall in the last quarter and subsequent years. However, the shock due to the fall in remittance is lessened if it is accompanied by a fall in imports. Conversely, devaluating Nepalese rupees in comparison to the US dollar exerts pressure on maintaining the trade deficit. Likewise, remittance drives consumption as 79 percent of the total remittance is consumed (NLSS III, 2010/11). Moreover, 58.2 percent of rural households receive remittance; hence, the fall in remittance inflow affects rural households. With the majority of poor people reside in rural areas, rural poverty is likely to rise.


The government of Nepal shall focus on utilizing Rapid Disbursement Emergency Financing created by the World Bank Group. Likewise, the fund raised in SAARC COVID-19 Emergency Fund shall be channelized towards the health sector without further delay. Likewise, the IMF has allocated $ 3 billion in 'Rapid Disbursement Emergency Financing'. The government of Nepal must take quick initiatives and direct unutilized funds towards the subdue of COVID-19. The mounting pressure on the health sector calls for prompt action against the spread of coronavirus, quick disbursement of medical equipment, and proper management of quarantine spots.

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