Nepal

The socio-economic impacts of the pandemic in Nepal can be understood in the context of its dependence on tourism, foreign employment and remittances for economic stability. While the early lockdown helped slow down infection rates, the negative socio-economic impacts are disproportionally impacting the most vulnerable; women, informal sector workers, migrant returnees, internal migrants, day laborers, and those involved in micro and small enterprises. Nepal’s ambition of graduating from the status of least developed country by 2026 and to becoming a middle-income nation by 2030, has been severely impacted by the COVID-19 pandemic.

Subnational Human Development Index

COVID-19 socio-economic response 2021

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UN75

Results from the UN75 One-minute Survey

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Macroeconomic predictions

This analysis is based on the results of the socio-economic impact-assessment carried out mid-2020

Key Insights
  • Forecasts for Nepal’s GDP growth rate are as low as 1.5 to 2.8 percent, from previously estimated 6.4 percent (World Bank).
  • The highest negative impact of the COVID-19 pandemic on sectors of Nepal’s economy are on accommodation and food services, arts, entertainment and recreation, and transport. These three sectors together account for 7.8 percent of GDP and provide employment to 10.2 percent of the total employed population.
Methodology

The predictions consider total earnings from tourism, employment in travel and tourism, remittance receipts along with macroeconomic variables such as inflation, gross domestic product (GDP), interest rates, and international trade. These were drawn from relevant ministries, Nepal Rastra Bank and several multi-lateral organizations.

Microeconomic impact

Impact on businesses by province. This analysis is based on the results of the socio-economic impact-assessment carried out mid-2020

Key Findings
  • When asked if businesses can cope with the shock of the lockdown on their own, 77 percent answered no.
  • Due to the lockdown, businesses have reduced the number of paid workers by an average of between 50 and 60 percent. These businesses previously employed an average of one to five workers.
  • The lockdown also impacted the days of operation per month, dropping from 29-30 on average to 17.
Methodology

The UNDP rolled out a survey in April 2020 to map the microeconomic impact, reaching 700 small and micro entrepreneurs from three ecological regions, seven provinces and 27 districts. The selection of districts, businesses and individuals within those districts was based on purposeful and snowball sampling technique.

Impact by gender

This analysisis based on the results of the socio-economic impact-assessment carried out mid-2020

Key Insights
  • Because of the lockdown, 28 percent of male respondents and 41 percent of female respondents lost their jobs.
  • Borrowing food and money were the most common coping strategies. Only 0.8 percent of respondents had to sell their assets (such as radio, furniture and animals) to manage the crisis.
  • ‘Monthly rations of food’ and ‘monthly financial support’ were the top two rated support types by both women and men.
Methodology

A phone survey with 400 vulnerable community individuals across the country was conducted in April 2020 to map impact on livelihoods, social safety nets, dependents, crisis management, and support from state or non-state actors.

Rapid Assessment of Socio Economic Impact of COVID-19 in Nepal

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