KATHMANDU: The World Bank has projected Nepal’s economy to grow by 2.7 percent in the current fiscal year 2020-21.
Releasing its South Asia Economic Focus on Wednesday, the World Bank has revised Nepal’s growth forecast up by 0.6 percentage point from a projection of 2.1 percent in January. However, the latest World Bank’s projection is still far less compared to the government’s target to achieve 7 percent economic growth rate for the current fiscal year.
“Countries dependent on tourism, especially Bhutan, Sri Lanka, Maldives, and Nepal were heavily affected by the crisis as their tourism sector could take significantly longer to fully recover,” reads the World Bank Report.
The report has reflected the improved economic outlook of Nepal and other South Asian countries’ efforts to keep their COVID-19 caseload under control and swiftly roll out vaccine campaigns.
“Governments’ decisions to transition from widespread lockdowns to more targeted interventions, accommodating monetary policies and fiscal stimuli—through targeted cash transfers and employment compensation programs—have also propped up recovery,” reads the report.
The outlook for Bangladesh and and Pakistan has also been revised upward, supported by better than expected remittance inflows: Bangladesh’s gross domestic product (GDP) is expected to increase by 3.6 percent in 2021 while Pakistan’s growth is expected to reach 1.3 percent in 2021, slightly above previous projections.
“We are encouraged to see clear signs of an economic rebound in South Asia, but the pandemic is not yet under control and the recovery remains fragile, calling for vigilance,” said Hartwig Schafer, World Bank Vice President for the South Asia Region. “Going forward, South Asian countries need to ramp up their vaccination programs and invest their scarce resources wisely to set a foundation for a more inclusive and resilient future.”