This paper reviews the key aspects of general strikes and analyses the economic cost of
such strikes in Nepal. Data analysis shows that average direct cost of general strikes
stood at NRs. 1.8 billion per strike day and NRs. 27 billion per year at current prices
during 2008-2013. The lost output per year accounted for 1.4 percent of the annual gross
output. The total accumulated output loss due to general strikes in the five-year period
amounted to NRs. 117 billion. With such losses, general strikes decelerated annual GDP
growth rates in a range between 0.6 percentage point and 2.2 percentage points during
the study period. The impact of general strikes was quick and significant on inflation and
tourist arrival rates. The monthly inflation rate jumped to over 9 percent as a result of
two-day general strike while the strike called for three or more days led to an inflation of
more than 10 percent. Similarly, tourist arrival declined over a lag. However, gross fixed
capital formation and foreign direct investment appeared to be less affected by general
strikes, which might be due mainly to their bottomed out levels.