The covid pandemic has brought with it unprecedented challenges for governments across the globe. From tackling the medical aspects of the infection and controlling its spread, governments have to address the issues relating to the economic impact, which is a double jeopardy. With no clarity on how soon or how late the pandemic is likely to be brought under control, varying economic scenarios from global think tanks and experts all agree on the possibility of a long drawn global recession of varying magnitudes for each country.
Assisting nations to minimize the economic hardships as a result of the pandemic and chalking out a way forward, the World Economic Forum (WEF) on its part has been proactively sharing various policy recommendations. Since each country has its own dynamics and financial outlooks, some of these recommendations may be more suitable than others. Taking a cue from the WEF suggestions, countries like Nepal for example have recently unveiled their new monetary policies for FY 2020-21 with a focused approach on mitigating economic effects of the pandemic.
BANKING SECTOR DEVELOPMENT
What remains a challenge for many nations and small economies like Nepal is to bridge the gap between WEF’s recommendations and the slow pace of development in the banking sector. As a case in point, WEF has suggested that policy makers must ensure their financial systems are capable of safely meeting the public’s need for financial services through digital channels. Now this may be a given thing in developed and emerging economies like India but smaller economies may find it hard to suddenly scale up the level of digital transformation in their financial sector.
The challenges may be complex and varied but smart financial enterprises and banks are proactively assessing the situation, trying to flatten the curve, stay afloat and eventually revive in the medium to long term. Smaller economies may in fact show the way forward with their faster pace of assessment of the situation on ground while concurrently assessing how new introduced measures may be bringing in the required support for the banking and financial sector at large.
IMPACT ON SMALLER ECONOMIES
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