Tuesday, 28 May, 2024

Challenges Of Growth

The COVID-19 pandemic has taken its toll on every sector globally since its outbreak more than two years ago. As the century’s worst global public health emergency, this pandemic has dealt a severe blow, especially to the public health, economy, education and development activities. The world has continued to witness newer variants of this deadly virus one after another.

With no sign of dying out of this virus in sight, it has created a sense of uncertainty among global populace. Nepal, as a nation without sound economic and development indicators, has suffered a lot from the pandemic. However, the country has been struggling hard to achieve a higher economic growth. But it has failed to do so due mainly to the lingering contagion. The country’s economy is still based on remittances and agriculture. Since the nation has not been successful in enhancing the export trade by producing more tradable items, it is still reeling from a widening trade deficit. The remittance sector, too, has remained badly affected by the pandemic.

Notwithstanding such an adverse scenario, the government has set a target of realising a seven per cent annual economic growth for this year. But the World Bank (WB) has projected that the country’s gross domestic products (GDP) will be limited within 3.9 per cent. The Global Economic Prospects report released on Wednesday is based on the expanding COVID-19 vaccine coverage, growth in agricultural productivity and progresses in the service sector. This projection is 0.2 per cent lower than the estimate made by the Asian Development Bank (ADB). It may be recalled here that the WB had in October 2021 estimated the same growth rate for the country for this year. Its report had attributed growth rate to the removal of containment measures, vaccination drive and gradual recovery of tourism and flow of migration workers. But the economic growth projection may not be achieved given the current resurgence of the coronavirus infections following the outbreak of the omicron variant.

As part of its measures to contain the viral disease, the government has lately enforced a smart lockdown in the Kathmandu Valley. The similar types of curbs are going to be imposed in other areas at high risk of the contagion. In view of the surge of COVID-19 infections at a worrying scale in the recent times, the country may have to adopt additional restrictions to deal with the pandemic. According to the fresh updates maintained by the Ministry of Health and Population (MoHP), the COVID-19 infection rate increased to 27 per cent on Wednesday in comparison to 9.5 per cent on Sunday. The government has attached high priority to saving people’s lives. It has already decided to fully mobilise all the state apparatuses to rein in the pandemic.

It is important for the government to accord top priority to saving the economy and sustaining its growth as well. Anyway, the government seems to be serious about boosting the economic growth. This is the reason why it has opted for the smart lockdown instead of reinstating the nationwide strict lockdowns. The national economy had suffered a great setback after the first and second lockdowns in the past. Realising this fact, the government has now come up with a two-pronged approach of saving citizens’ lives and consolidating the national economy already affected by the pandemic.