Bangladesh economy in comfort zone

The world including Bangladesh suffered decisive blows to all sectors of life since the deadly virus named Covid-19 announced its evil presence in human societies towards the end of 2019. It ravaged through the life and living of the people everywhere making no discrimination whatsoever. Therefore, keeping the economy kicking in 2020 and 2021 became the prime objective of the governments in all the countries. Bangladesh was also hit badly by the onslaught of the scourge. But, thanks to the blessings of nature and some pragmatic decisions taken by the government, the worst could be averted so far.     

Against such a background of deaths and disability, we welcome the morale-boosting news that Bangladesh economy is flourishing with a 3.51 per cent GDP growth in the year 2020. This piece of information should make the business leaders, common people and the government planners happy. What is more pleasant to hear is the fact that this is happening at a time when the South Asian countries posted negative growth because of the ongoing malaise of Covid-19. A Bangladesh Bureau of Statistics (BBS) report says that the economy grew by 3.51 per cent in fiscal year 2019-20, while it has been predicted to reach 5.47 per cent for FY20-21.

Reportedly, India and Pakistan witnessed contraction in economic growth during this period at the rate of 7.3 per cent and 0.47 per cent respectively. At the same time Sri Lankan economy contracted by 3.6 per cent in 2020, while Bhutan‘s economy dipped by 6.3 per cent, followed by Nepal (2.1 per cent) and Maldives (32 per cent).

Now the pertinent question that comes up is what made this possible for Bangladesh and who are the main players? Market analysts believe that the quick response and coordinated efforts undertaken by the government to combat Covid-19 fallout has helped the country’s economy remain positive. Side by side, continued inflow of remittance, quick recovery in readymade garment exports and higher agricultural growth greatly helped not only to keep the economy afloat but see upward trend as well.

Eminent researchers of the country commented that when the South Asian economies recorded negative growth, Bangladesh’s positive growth showed its strength and competitiveness. They stress on the excellent growth of agriculture, RMG exports and remittance inflow for the success. Agriculture and remittance were stable amid the pandemic, while apparel exports showed quick recovery.

Export Promotion Bureau (EPB) tells us that Bangladesh’s apparel exports posted a 12.55 per cent growth to $31.45 billion in 2020-21 fiscal year, which was $27.95 billion in the previous fiscal. This should be cited as a positive example that the RMG factories worked to meet the shipment deadlines maintaining health measures when all other factories and commercial houses remained closed for months together during that period. According to the Department of Agriculture Extension, all major crops posted robust growth in the last fiscal year. Government data show that rice production increased to 366 tonnes in FY20, which was 365 tonnes in FY19, while vegetable production rose to 184 tonnes, which was 172 tonnes in the previous year.

 Experts on economic dynamics point out the immediate responses taken by the government to address the Covid-19 health risk along with different types of financial and policy support to combat the fallout of the pandemic actually protected the economy from sliding downward despite disruption in the supply chain.

Bangladesh Bank research on Covid-19 Pandemic: ‘Policy Responses and its Impact on SAARC Countries’ elaborated that financial sector regulators had made coordinated efforts with the government on various fronts by combining fiscal and monetary stimulus, regulatory and supervisory measures and economic policy innovations to overcome the adverse impacts of the pandemic on the economy.

It may be mentioned here that in an immediate response to tackle the economic fallout of Covid-19, the government announced a series of stimulus packages and refinance schemes equivalent to Tk 1,28,440 crore, which was 4.59 per cent of GDP.

As the pandemic is yet to be contained, the stakeholders must not be complacent. They have to work concertedly to retain the positive growth by providing fresh stimulus packages and continuing with the existing policy supports.