Dull economic activity in the market!

Kathmandu: Nepal has been slowly diving into an economic crisis. This has been directly affecting the market and its consequences are being seen.

Economists have found the decline in economic activity that has driven challenges to the economy in the major cities including Kathmandu.

Vacant shutters, a decline in paying guests, less crowding in banks, as well as corporate buildings in the major cities, are some of the signals of an approaching economic crisis in recent times.

There was a time when banks used to struggle for cash and check deposits. Even the four service counters used to be inadequate. But Banks have been providing their services from only two counters nowadays.

Likewise, the crowd in front of wholesale shops and parking problems is also declining. Hospitality business areas including hotels, restaurants, etc. are also struggling for customers. This has also triggered business in vegetable, meat, and retail shops.

The number of people seeking a recommendation for real estate business in government offices has almost dropped to zero. This has also affected the crowd in local and municipal offices. It has decreased the number of people seeking services from municipal and governmental organizations.

The advertisements for promoting business products have also decreased. Public places including party palaces and seminar halls are getting less crowded.

2-wheeler and 4-wheeler businesses are also facing customer crises. Automobile businessman Suvarna Nakarmi says, ‘The automobile business is in a pathetic situation. The booking of vehicles is close to zero. Although the demand for electric vehicles is increasing, there is no booking due to the weak financial situation of customers. It has even become difficult to bring the vehicles that are in customs. Government has been late in initiating steps to improve the situation.’

The upcoming economic crisis in Nepal is the result of the economy revolving around limited people and government apathy says the small businesses.

‘Only limited people, in the name of business groups, have access to the cash of banks. Limited people are driving the economy of Nepal as per their needs. And as Government and Nepal Rastra Bank is not able to monitor such activities, the situation is getting worse.’, says builder Harka Ghising.

Likewise, The hospitality business owners are also facing a decline in business. Most of the owners describe their situation as taking loans for paying the salary of the staff and rent.

Bishnu Bastakoti, who runs a restaurant in Boudha, says, ‘There was a time when people could not get a place for having food and even we used to be busy in giving services to everyone. But, not even 1-2 customers pay their visit nowadays.’

He says that the business is not able to generate income adequate for the monthly rental, salary for staff, and paying interest on bank loans.

Bishnu adds, ‘I somehow struggled in saving the business with the hope that conditions would get better but it seems impossible now. The income has declined halved but there is no chance of decreasing bank interest and rent. If the situation remains the same, how can I sustain the business?’

Similarly, small businesses like cloth shops, cosmetic shops, parlors, tea shops, etc. are also facing the same problems. They have reached the point of selling their shops as people are not even entering the shop.

Sarita Subedi, who has been running a cosmetic shop in Old Baneshwor for seven years, says, ‘I had put my shop into a sale, to clear the school fee of my children and pay the rent for the past two months. But no one is seeking desire for investing.’

Sarita had decided to return to her village after the market was badly hit by COVID-19. But remained hopeful. She added, ‘I dropped the plan of returning to the village with the hope that there will be an improvement in the economic situation. I was waiting for the improvement but my loan has increased by 2 lakhs 70 thousand rupees. ‘

Stakeholders are complaining that the government is still not ready with a concrete plan although the economic crisis is clearly visible.

High interest in banks and cooperatives on one side, and zero business on another side has compelled business owners to plan for an alternative for survival.

According to the economist, the balance sheet of the majority of businesses would be affected if this kind of situation persists for some more time. The decrease in the income of people is directly proportional to their incompetency in paying loans as per the economists.

This might create an environment, in which the proprietors won’t be able to provide service and create the product even in case of an increase in demand. Economists analyze the situation as a threat to the financial stability of Nepal.

Nepali version of this article