Trade blockade

Political unrest in Nepal’s Terai region in the run-up to and following the introduction of the new constitution on September 20 has led to the obstruction of trade, something that is having a significant impact on the country’s economy. The Terai-based parties’ agitation has resulted in serious disruption of imports of major commodities such as petroleum products, construction and industrial raw materials and other essentials. The resulting acute shortage of petroleum products is the most serious problem. Although the government has initiated political and diplomatic negotiations, it remains unclear how soon the stalemate will be resolved. The Terai unrest and the trade and transit obstruction will have a major adverse impact on GDP growth at least in fiscal year (FY) 2016, beyond the impact of the earthquake. GDP grew by 5.2% to $19.8 billion in FY2014, according to ADB. Nepal is the fifth largest economy among the eight South Asian countries... —