Impact of COVID-19 on Nepalese Economy : Summary of the Findings from the NRB Follow-Up Survey

Nepal Rastra Bank, the Central Bank of Nepal has published the Second Follow-up Report on ' Impact of COVID-19 on Nepalese economy on May 19, 2021.  The first phase of the survey was conducted in July 2020, the first follow-up survey in November 2020 and the second follow-up survey was conducted in April 2021. 

The first phase of the survey covered 674 businesses operating across 52 districts of the country while 604 businesses out of the 674 participated in the first follow-up and 562 businesses participated in the second follow-up survey.

The results from the survey show that the business activities as well as employment situation has improved significantly compared to July 2020. While only 4.1 percent of the businesses were operating at full scale, such share of firms increased to 54 percent in November 2020 and 81.2 percent in April 2021. Consequently, the share of firms in non-operation status steadily decreased from 61 percent in July 2020 to 4.2 percent in April 2021. 

All types of business have experienced improvements but the rate of improvements differ. The businesses from mining, transport and storage, and tourism sector seems to have lower rate of revival. As of April 2021, about 20 percent of the business from mining sector, 16.7 percent from transport and storage sector and 8.3 percent of the businesses from the hotel sector were not in non-operation status. On the other hand, all of the businesses of electricity, gas and water, and communication sector had operated at full level.

According to the size of businesses. while non of the large industries were in non-operation status in April 2021, around 6 percent of the cottage as well as micro businesses were in non-operation status. 

Taking the pre-COVID production level to be 100, all types of businesses were found to be below the pre-COVID level. The businesses were found to be operating at 28.8 percent of the pre-COVID output in July 2020 and 50.5 percent in November 2020. Such a situation improved to 61.4 percent in April 2021. 

Health services related businesses, agro-businesses, construction related businesses and manufacturing related businesses were found to be producing more than 70 of the pre-COVID output while hotel and restaurant businesses were found to be operating at 41 percent of the Pre-COVID level of output only.   

In terms of the size of the businesses, medium as well as large sized businesses seem to have recovered faster than other businesses. In April 2021, the medium as well as large businesses were found to be producing 65 and 73 percent of their respective pre-COVID level of output.   

Employment situation in April 2021 seem to have recovered compared  to July 2020.  Compared to the  pre-COVID level (=100), the average employment in the businesses reached 93.8 percent. Such a figure was 87.5 percent in November 2020 and 77.5 percent in July 2020. 

Employment seems to have recovered faster in micro, cottage  and small businesses compared to middle and large industries.  

The wage and salary expenses of the businesses has increased during the survey periods. In July 2020, businesses spent 63.4 percent of the amount they used to at the pre-COVID level.  Such amount increased to 70.4 percent in November 2020 and 88.5 percent in April 2021. 

The data file in excel format can be downloaded from here.  The blogger can be contacted at siddhabhatta@gmail.com .

Permanent link of the report is here