With the disease comes added debt

In many ways, developing countries can be likened to upstart companies with a lot of growth potential. Debt can help, if exercised judiciously.

The Covid-19 pandemic has thrown a curveball to the global economy in the most unexpected fashion. Trade, travel, tourism, you name it, have all been adversely impacted. Well-heeled businesses have suddenly ceased to operate, people’s livelihoods have been thrown into disarray and the government’s revenue sources have taken a hit on multiple fronts. Rich countries, poor countries—no one is spared. Fiscal deficit has become the norm, even as governments whose accounts were already awash in red ink are having to run a bigger deficit. It is a double whammy—receipts are down while expenditures are up. The resulting mismatch is forcing many governments into a budgetary juggling act. Nepal is not an exception.