Covid-19, the new viral disease that erupted in China in early December, has now spread around the world, invading 78 countries so far. Governments in most countries are calling for social distancing, with most schools already closing or contemplating closure. Nepal has recorded just once case so far, that too recovered, but concerns over the virus spread remain.

Quite naturally, the impact of the virus outbreak on the global economy is becoming apparent. In Nepal, with hotel occupancy plummeting, the hospitality industry is already vulnerable to lost demand. The manufacturing sector is equally susceptible since most of the raw materials come from China. Like the World Health Organisation warned, ‘the world has entered unchartered territory’ in its battle against the deadly coronavirus. For countries like ours where the health care system is dysfunctional by nature and inadequate in resources, the virus is bound to infect Nepali society and the economy.

Nepal Rastra Bank released its Mid-Term Review of the 2019-20 Monetary Policy earlier this week. The report projected that the spread of the coronavirus, along with decreased paddy production this year, would have a negative impact on the economy. As it is, the global supply chain is already crippled and air travel has been hit hard. Supply chain disruptions have serious repercussions for industries such as pharmaceuticals and manufacturing. Nepal’s pharmaceutical industry is heavily dependent on China for chemicals. Similar is the case with packaging industries, hardware and other businesses.

According to the Central Bureau of Statistics, the wholesale and retail sector is the second-largest contributor to the economy after agriculture. It accounts for 14.37 percent of the GDP. What’s more, China is Nepal’s second-largest trading partner after India, and a large number of retail goods are imported from China.

Away from home, globally, markets were spooked by the uncertain impact of the virus on the global economy with investors dumping their shares.

Since the impact of the outbreak on the economy is still an unfolding story, the government needs to hope for the best and prepare for the worst. It would be prudent for Yuba Raj Khatiwada, who was appointed reappointed finance minister on Wednesday, to keep things realistic and make projections about the economy accordingly in the upcoming budget.

It would be unrealistic to expect governments to eliminate uncertainty, but they can very well ensure a transparent and accurate flow of information. What’s more, the budget must allocate significant funds to programmes meant to study infectious diseases and prevent outbreaks. There is no alternative to upgrading the Sukraraj Tropical and Infectious Disease Hospital in Teku and equipping it with more beds, necessary isolation wards and other paraphernalia necessary for medical centres.

Nepalis have time and again shown resilience—be it during the decade-long Maoist insurgency, after the Gorkha Earthquake of 2015 or after the unofficial blockade that followed on its heels—our collective will to rise through has taken us thus far. Although the Covid-19 virus will have hit our economy and possibly cause hardship among the people, the government needs to watch the developing situation and do all it can to support industries that are reliant on Chinese inputs.