The ongoing COVID-19 pandemic could push nearly one third of Nepal’s population below poverty line due to the loss of livelihoods in the wake of the health crisis, the World Bank said in a report.
The Nepal Development Update, a bi-annual report of the global lender released on Thursday, said that an estimated 31.2 per cent of the population who live close to the poverty line are at high risk of falling into extreme poverty, reports Xinhua news agency.
According to the Nepal government, 18.7 per cent the population live under the poverty line currently.
The warning comes at a time when the COVID-19 pandemic, coupled with lockdowns and travel restrictions imposed by the government, has impacted livelihoods of people in Nepal.
On July 20, Nepal’s cabinet ended the nearly four-month lockdown but still maintaining a few restrictions.
“Across all sectors, informal workers or those without social security or assistance will be most vulnerable to falling into extreme poverty,” the report said.
“Within this group, informal sector workers and self-employed households in urban areas may be more vulnerable than rural households that can fall back on subsistence farming.”
During the online launch of the report, Finance Minister Yubaraj Khatiwada admitted that measures taken to save lives from the pandemic affected Nepal’s fight to eradicate poverty.
“Due to urgent measures we had to take to save lives with restriction on the movement of people has substantially affected the chain of production, trade and investment followed by job losses and reversal of achievement made in poverty reduction,” he said.
Poverty headcount rates were 42 per cent in 1995, 31 per cent in 2003, and 25 per cent in 2010 and which came down further in the last one decade, according to the National Planning Commission of Nepal.
The World Bank report also said that Nepal’s economic outlook is uncertain.
The Himalayan nation is likely to see a meagre growth of 2.1 per cent in best case scenario to a contraction of 2.8 per cent in the worst case scenario in current fiscal year 2020-21.