A Review of the Economic Impacts of the COVID-19 Pandemic and Economic Policies in Nepal

Raut, Nirmal Kumar (2020): A Review of the Economic Impacts of the COVID-19 Pandemic and Economic Policies in Nepal.

Abstract

This paper undertakes a descriptive review of the macroeconomic and microeconomic impact of COVID-19 and of the consequent lockdown imposed by the government in Nepal. The review shows that almost all macroeconomic indicators have either slowed down or become negative suggesting adverse effect of COVID-19 on Nepalese economy. Likewise, at micro level, the review shows that it has severely affected the household economy as well as the business firms. The effects are identified on health, education, food security and employment. At the firm level, the cost and unemployment have increased while the productivity, profit and income have decreased. This therefore calls for the concerted efforts on the part of all the stakeholders, more importantly the State to adopt a policy-mix that can adequately manage the health crisis on the one hand and the livelihood on the other, keeping in mind their long term effects on accumulation of financial, physical and human capital.

• Item Type: MPRA Paper
• Language: English
• Keywords: COVID-19, Economic Impact, Nepal
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy

References

Alex-petersen, J. (2017). Long-Term Effects of Childhood Nutrition : Evidence from a School Lunch Reform Long-Term Effects of Childhood Nutrition : Evidence from a School Lunch Reform (IZA DP No. 11234). IZA Discussion Paper. Retrieved from https://www.iza.org/publications/dp/11234/long-term-effects-of-childhood-nutrition-evidence-from-a-school-lunch-reform Armitage, R., & Nellums, L. B. (2020). COVID-19 and the consequences of isolating the elderly. The Lancet Public Health, 5(5), E256. https://doi.org/10.1016/S2468-2667(20)30061-X Bloom, D. E., Canning, D., & Shenoy, E. S. (2011). The effect of vaccination on children’s physical and cognitive development in the Philippines. Applied Economics, 44(21), 2777–2783. https://doi.org/10.1080/00036846.2011.566203 Bütikofer, A., Mølland, E., & Salvanes, K. G. (2018). Childhood nutrition and labor market outcomes: Evidence from a school breakfast program. Journal of Public Economics, 168, 62–80. https://doi.org/10.1016/j.jpubeco.2018.08.008 Chandra, S., Samadarshi, A., Sharma, S., & Bhatta, J. (2020). An online survey of factors associated with self-perceived stress during the initial stage of the COVID-19 outbreak in. The Ethiopian Journal of Health Development, 34(2). Chen, H., Guo, J., Wang, C., Luo, F., Yu, X., Zhang, W., … Zhang, Y. (2020). Clinical characteristics and intrauterine vertical transmission potential of COVID-19 infection in nine pregnant women: a retrospective review of medical records. The Lancet, 395(10226), 809–815. https://doi.org/10.1016/S0140-6736(20)30360-3 Department of health services Nepal. (2017). Nepal Demographic and Health Survey 2016. Gautam, D. (2020). The COVID-19 Crisis in Nepal : Coping Crackdown Challenges Key Initiatives and Measures to Move Forward. National Disaster Risk Reduction Centre Nepal, Kathmandu. Retrieved from https://www.alnap.org/system/files/content/resource/files/main/The COVID-19 Crisis in Nepal_Coping Crackdown Challenges 2020-04-24 07-51-31.pdf Holmes, E. A., O’Connor, R. C., Perry, V. H., Tracey, I., Wessely, S., Arseneault, L., … Bullmore, E. (2020). Multidisciplinary research priorities for the COVID-19 pandemic: a call for action for mental health science. The Lancet Psychiatry, 7(6), 547–560. https://doi.org/10.1016/S2215-0366(20)30168-1 ILO. (2020). COVID-19 labour market impact in Nepal. International Labour Organization: International Labour Organization. Liu, H., Wang, L. L., Zhao, S. J., Kwak-Kim, J., Mor, G., & Liao, A. H. (2020). Why are pregnant women susceptible to COVID-19? An immunological viewpoint. Journal of Reproductive Immunology, 139, 103122. https://doi.org/10.1016/j.jri.2020.103122 McGovern, M. E., Krishna, A., Aguayo, V. M., & Subramanian, S. V. (2017). A review of the evidence linking child stunting to economic outcomes. International Journal of Epidemiology, 46(4), 1171–1191. https://doi.org/10.1093/ije/dyx017 National Planning Commission/ Government Of Nepal. (2017). Report on the Nepal Labour Force Survey 2017/18. Central Bureau of Statistics, Nepal. Rajkumar, R. P. (2020). COVID-19 and mental health: A review of the existing literature. Asian Journal of Psychiatry, 52, 102066. https://doi.org/10.1016/j.ajp.2020.102066 Shrestha, A. M., Shrestha, U. B., Sharma, R., & Bhattarai, S. (2020). Lockdown caused by COVID-19 pandemic reduces air pollution in cities worldwide. EarthArXiv. Retrieved from https://eartharxiv.org/edt4j/?fbclid=IwAR0gcT_DRfUa6SAM7zZVTh7ZobOHchB870pCmwbt_Ns36NTTn274mbTzuxs The World Bank. (2020). South Asia Economic Focus, Spring 2020 : The Cursed Blessing of Public Banks. The World Bank, Washington D.C. https://doi.org/10.1596/978-1-4648-1566-9 UN(2020). A UN framework for the immediate socio-economic response to COVID-19. United Nations. https://unsdg.un.org/sites/default/files/2020-04/UN-framework-for-the-immediate-socio-economic-response-to-COVID-19.pdf UNDP. (2020). RAPID ASSESSMENT OF SOCIO ECONOMIC IMPACT OF COVID-19 IN NEPAL. United Nations Development Programme, Lalitpur, Nepal. Retrieved from file:///C:/Users/Nirmal/Google Drive/Misc/GAAN/Nepal%2520Rapid%2520Assessment%2520COVID19%2520Final.pdf Zambrano-monserrate, M. A., Alejandra, M., & Sanchez-alcalde, L. (2020). Indirect effects of COVID-19 on the environment. Science of the Total Environment, 728, 138813. https://doi.org/10.1016/j.scitotenv.2020.138813 Zhu, H., Wang, L., Fang, C., Peng, S., Zhang, L., Chang, G., … Zhou, W. (2020). Clinical analysis of 10 neonates born to mothers with 2019-nCoV pneumonia. Translational Pediatrics, 9(1), 51. https://doi.org/10.21037/tp.2020.02.06