Lumpy Skin Outbreak is Affecting the Economic Growth Rate, Is it Affecting Insurance Companies too?
Kathmandu : The Asian Development Bank (ADB) has predicted that the impact of the Lumpy Skin epidemic will affect the economic growth rate. Projecting an economic growth rate of 4.3 percent in 2024 A.D, it said that the effect of lumpy skin will be seen in the economic growth rate this year i.e 2023.This year, the government has estimated that the economic growth rate will be around 7 %. According to ADB, the expansion of the agricultural sector will be reduced due to the lack of sufficient rain during the rainy season this year and the outbreak of lampy skin on livestock.According to ADB, the service sector will remain in good form this year due to the expansion of real estate wholesale and retail trade, housing and food services.
Due to Slowdown in crude oil prices in the international market and the decrease in inflation in India, the source country of Nepal’s imports, the price increase in Nepal is unpredictable .Any time the price of market can Increase. According to the ADB Nepal Mission Chief Economist Ian Hanson, this year, the government has set an ambitious revenue growth target but if that revenue target is not achieved then the actual budget deficit may be more significant than estimated .
The risk of the external sector has been relatively resolved, ADB has said that due to the current trend and the monetary policy of the central bank, the goal of maintaining sufficient foreign exchange reserves is sufficient to cover at least 7 months of imports only. It is also estimated that the current account deficit will widen to 1.8 percent of the gross domestic product due to the stability seen in remittance inflows and high imports.
Insurance companies are likely to be affected by animal insurance claims related to lumpy skin worth Millions of rupees.Until the government declares an epidemic, the insurance companies have the right to give claims to the farmers. So far, the companies have remained silent on this issue. But farmers have become aggressive.