Safe from Recession
Nepal’s economists have predicted that the current economic recession in the U.S. and Europe will not hit Nepal but will only bring marginal slash in exports and donations from these regions.
Addressing the media last month, Suresh Kumar Basnet, President of Nepal Chambers of Commerce said since Nepal does not have any direct dependency on the countries affected by recession, it will not make the country “bleed to death.” However, he suggested the government to watch out for Indian measures and act accordingly. “We have special relations, trade ties and static exchange rate with India, so effects on the Indian economy will directly hit Nepal,” he said.
The recession is also not likely to affect Nepali foreign job markets - Malaysia and Gulf States. “They are developing countries with high growth rate, so recession will not affect the market in the early stage,” Mr. Basnet added. According to Nepal Rastra Bank, the government earned Rs 229.52 billion in remittances last year.
However, senior economist and former bureaucrat Dr. Bhola Chalise said that the current recession in America and Europe could enter the Gulf region soon enough that could cause severe affect to the remittance dominated economy like Nepal.
“World economy is volatile since 2008, so as a small country Nepal should take precautionary measures closely observing neighbors,” he suggested, adding that the recession in America and Europe will affect aid from the region to Nepal.