Nepal’s biggest festival Dashain fails to lift the market mood, buyers and sellers sayIncomes have gone down, prices have gone up with supply chain obstructions in a country where 82 percent of the gross domestic product is based on consumption.
Prabha Karki has never missed wearing new clothes for tika on Bijaya Dashami, the tenth day of the Dashain festival. But this year, she has not planned on buying new clothes.
The 29-year-old woman from Daksinkali will wear her old clothes this Dashain.
“Traditionally, Dashain means buying new clothes and celebration,” said Karki. “But this time I will have to make do with something I have worn before.”
Like Karki, for many people the celebration this year is in pandemic mode as life has become elsewhere around the world.
Analysts say that the virus has 'squeezed' the majority of Nepalis as their spending has been growing while savings are evaporating. Household incomes available for consumption have been further squeezed by salary cuts, job losses and poor business environment.
Karki, who works as a receptionist at a tourist resort, saw her salary reduced significantly and did not get a Dashain bonus, equivalent to a month’s salary, from the company she is working for.
“With no Dashain bonus, I didn't bother to go shopping,” Karki told the Post.
Every year, the Dashain festival has been special to many Nepalis, particularly for the young, resulting in a massive shopping spree.
Karki remembers her shopping at New Road and malls elsewhere last year. The uncertainties stemming from the Covid-19 outbreak and restrictions meant for slowing the virus spread have depressed overall expectations of the Nepalis.
Many countries have eased Covid-19 related lockdowns but worries have mounted that another wave of infections could hurt economies.
Nepal’s economy came to a standstill mainly due to the lockdown towards the end of last fiscal year that ended in mid-July, registering a negligible growth of 0.2 percent, according to a recent report of the World Bank.
But despite businesses now being open, the outlook is bleak for the current fiscal year too.
The World Bank predicts the economy will grow by just 0.6 percent this fiscal year, as Covid-19 periodic and localised lockdowns continue to halt the economic activities.
The country’s financial hub Kathmandu has been in a depressed mood as it has been hardest-hit by the pandemic.
Of the 139,129 infections in the country as of Tuesday, 59,472 are in Kathmandu Valley, which is 42.74 percent of the total cases.
The Valley has had 56,974 cases after the three district administration offices in Kathmandu Valley imposed prohibitory orders on August 19. This is 51.4 percent of the total 110,872 cases since then.
While people with higher incomes were the major customers of the once mushrooming shopping malls, hundreds of street vendors across Kathmandu Valley had their separate clientele.
“Clothes displayed at the streets were not bad and were available at a reasonable rate,” says Karki, who likes to shop walking around the streets.
“I used to spend around Rs7,000 to Rs8,000 on clothes,” she said.
Every Dashain, Sunil Shrestha spent around Rs40,000 to Rs50,000 on average. This year, however, he has had to make reductions in his budget. He has set aside only around Rs20,000 to Rs25,000 for Dashain expenses, mostly for essential goods, specially food items, due to his shrinking income with a decline in his business.
“The situation is not like before. My family did not go out to shop in the Dashain market this year,” said Shrestha.
Shrestha, 50, who owns Shubham Handicraft that has been manufacturing Nepali handmade paper products for the last 28 years, says that business has declined by 50 to 60 percent since May.
“I am planning not to have unnecessary expenditures during the festival and am celebrating only with my family,” said Shrestha, who has a family of four.
The rising Covid-19 cases, coupled with declining incomes, lower spending capacity and people are not in a festive mood.
Gunakar Bhatta, spokesperson for Nepal Rastra Bank and the chief of the central bank’s research department, said people are refraining from spending their cash due to the uncertainty of today’s situation.
“There has been a massive decline in economic activity and income, and the country does not have that festive feel,” he said.
He said that with increasing Covid-19 cases and death rates, people are psychologically impacted and afraid to go outside, causing the slowdown in economic activity.
Namrata Khadka bought a set of new clothes and shoes for her 10-year-old son. She bought them online.
“We did not do family shopping this year,” said Khadka, 32, a staff nurse, from Lalitpur. “It’s a pandemic and buying new clothes on Dashain is not a must.”
“We feared going shopping due to the spread of virus so we will be wearing the same clothes and celebrating Dashain within our family,” she said.
Of Nepal’s gross domestic product of Rs3.7 trillion, 82 percent is spent on consumption—that’s Rs3 trillion, according to Nepal Rastra Bank.
This calculates to a monthly consumption of Rs250 billion but it is significantly higher in September and October with the festival season.
“But this year’s scenario is different. The consumption has been squeezed,” Bhatta said.
Traders corroborate this.
Naresh Katuwal, president of Nepal National Traders' Federation, said that wholesale trade of clothing has declined by 40 percent this Dashain with very little business taking place in retail. “The situation is the same in major cities across the country,” he said.
Until this year, people’s expenditure on clothes had been steadily increasing with incomes rising. Wholesale and retail traders used to put on sales offering heavy discounts on goods that were in stock, he said.
“But the virus killed all expectations,” said Katuwal.
Most of the readymade garments including footwear and other clothing accessories for Dashain are imported via Tatotpani and Kerung border points from China. This year, traders had to face another problem.
“The border points have been blocked for the past several months,” said Katuwal, adding that most of the clothes were ordered from India this year but even that was difficult with the shortage of workers there and hassles with transportation.
Thirty-year-old Jonita Shrestha, owner of Oj’s Glamour at Basundhara, Kathmandu that deals in women’s clothing, has never seen such a disappointing market mood before.
Her business has declined by 60 percent this Dashain, as compared to last year’s festival.
“I used to have sales of around Rs75,000 daily starting from Ghatasthapana [the first day of Dashain],” she said. “I even used to hire extra staff to manage the crowd. But this year, it has become hard to make even Rs20,000 a day,”
While sales have been down, prices have gone up.
Bharat Karki, senior secretary of the Nepal Trans-Himalayan Border Commerce Association, said that the government had jacked up the import duty and Covid-19 had pushed up freight charges which has increased the clothing price.
“A dress that used to cost Rs1,200 during last year's Dashain now costs Rs1,600,” Shrestha said.
Dhiraj Shrestha, president of the Ranjana Traders Association, remembers that last Dashain, he did not even have time to talk due to better-than-expected orders. “This year, I am killing flies.”