The outbreak of Covid2019 has affected the Nepalese economic and financial dimensions to a great extent than it had experienced in the past earthquake and terai-madhesh violence movement in 2015.The government major source income has been adversely affected due to long going lockdown, but the expenditures has been increased in the health sector enormously . This will slow down the government expenditures on the development and infrastructures sectors in the country. This pandemic will create a long term impact on the developing countries like Nepal.

The various sectors has been hit hardly and impacted Nepalese economy in the following ways:

Tourism sector: This sector has been adversely fallout for the long term due to this pandemic Covid2019 .As this sector contributes significant role in creating employment opportunities and in earning foreign currency, so, dropping in this sector creates fall in various businesses related to it like hotels, restaurants, lodges, airlines and so on as well as creates unemployment to lots of people. Government makes handsome earnings from mountain tourism every year, but due to this pandemic Covid 2019, it has been dropped, as a result, foreign exchange reserves will also fall down due to the fall in this sector. The village tourism place like Ghandhruk is also affected to a great extent. Due to fallout on this sector, it will also impact on the banking sector loan portfolio and quality as the loan provided to the hotel industry and business will have chances to go bad and default loan due to the tourist slump.

Education sector:  The teaching methodology will be transformed into the phase of digitalization for which the baby steps have already been initiated by various institutions. But in the context of our country, the digitalization methodology may not be as much effective in the initial stage as both the students and teachers are not friendly with this digitalization teaching learning and techniques. There are various constraints in the current environment like lake of internet connectivity in the rural sectors, lack of teaching professionals in this field and various others. The temporary salaried professional’s earnings are affected for the short term due to this pandemic disease.

Health Sector: The private health institutions are affected to a great extent during the Covid 2019 as most of them are closed. The pharmaceuticals industries associated with this sector has not been so much affected during the Covid 2019, but they are facing difficulties in importing raw materials from the third country and in supplying their products due to closed down of transportation services and so on. Hence, this sector has not been so much affected due to it.

Wholesale and retail business: As we know that, this sector is the second largest sector to the economy after agriculture and contributes 14.37% to the economy. This sector has been hit badly after the outbreak of this disease. The import business from China has been dropped to a great extent. Not only this, cost of importing has been increased due to increase in dollar value; as a result, product cost has been increased. This scenario can also create inflation in the coming days. The working capital investment cycle of this sector will get increased and this will create insolvency problem to them.

Agriculture sector: This sector has not been so much affected during the Covid2019 in terms of productivity, but in the terms of distribution of its products has been affected due to lockdown and close in transportation facility. Though, this sector has been nominally affected during the covid 2019, but in the coming days this sector will improve as per my opinion. Most of the workers will return back to their own land and will start doing family business. As a sector, the productivity will be increased due to more involvement, implementation of skills and techniques learnt from third country and so on.So, according to my opinion, the agriculture sector will have positive impact and brightside after covid2019.

Manpower and remittance business: The manpower and remittance business has been negatively affected to a great extent for the long term during and after Covid 2019 due to fall down in employment opportunities in golf countries and fall down in tourism sector. The foreign exchange reserves and Balance of payment will go in deficit state due to fall down in remittance sector.

Banking and financial sector: This sector is also affected by the pandemic Covid 2019.The emerging scenario has reduced people’s confidence in investment in new businesses, as a result, investment opportunities for the banking sector in the form of loan has been declined, As a result, liquidity will increase in banking sector. The number of LC opening has been deceased due to decrease in import business, due to this; banks have to lose income associated to it. The operation risk has been increased to digitalization during covid2019. The cooperatives will have major negative impact after covid2019 as they do not hold sufficient collateral to recover their loan and most of their loans are given to the people working in the golf countries and small medium enterprises. So, there are high chances for the cooperatives to go their loan in the form of bad debt. The stock market has also been affected to a great extent due to ongoing lockdown and stock index will also fall down. Thus, income of the banking and financial sector has been reduced significantly.

Hence, in this way, various sectors of the Nepalese economy has been affected and hit hardly by the pandemic Covid 2019 and is facing very difficult time. Foreign tourists will no longer be flocking to a country spending significant amount of dollars for a long term. Instead, Nepal stands to potentially see millions of unemployed nationals returning home from abroad. Drop down in remittance income and foreign exchange reserves will have major impact on Nepalese economy due to effect in various sectors of the country.


Rekha Agrawal

Phd. Scholar

Lecturer Birgunj Public College