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To deal with the possible situation, Bangladesh has already limited the import of luxury goods and has reduced the cost of imports in addition to banning the foreign travel of officials except for urgent needs
Prime Minister Sheikh Hasina has expressed fear that the global might fall into an economic recession in 2023 and her government has already started taking preparing in advance to tackle the possible hardship.
Earlier last month, the World Bank also released a research report saying that the world economy is heading towards a recession by 2023.
Analysts believe that a situation has arisen in the world mainly due to the war in Ukraine after two years of the Covid-19 pandemic, which central banks and governments of different countries are struggling to deal with.
However, the prime minister mentioned the Ukraine war and the sanctions and counter-sanctions of the superpowers as the reasons for this situation in the global economy.
To deal with the situation, she advised the people of the country to grow crops on every inch of land so that people can save by increasing food production.
Incidentally, due to the various actions of the USA and Russia due to the war in Ukraine, the economy has already had various effects and the price of goods has increased a lot. There is a lot of concern about how the economy will stand if the crisis will not only persists but also increase in the future.
What PM said about global recession and Bangladesh
In a press conference after returning to Dhaka from a visit to the United Kingdom and the United States, she mentioned the meeting with various heads of state and governments during the United Nations session, and said that there might be a global famine and thought that possible disaster is approaching.
But she assured that Bangladesh has nothing to worry about at this moment. Foreign exchange reserves are also good enough to cover five months of import expenses.
“But if the world is in trouble, will we be in a good position? All initiatives are being taken to ease people’s suffering. We are planning ahead of the next budget,” she said at the press conference.
To deal with the possible situation, Bangladesh has already limited the import of luxury goods and has reduced the cost of imports in addition to banning the foreign travel of officials except for urgent needs.
In a meeting of the Executive Committee of the National Economic Council (Ecnec), held on October 11, 2022, Prime Minister Sheikh Hasina directed the members of the planning commission to be careful in making sure that there was no wastage in any development project.
In this context, the premier said all projects had to be taken up on the basis of sound policies and not to maintain relationships with any person.
She also directed that all unnecessary expenditures are curtailed and the main spending goes towards the core of any project.
Projects that were not required at present could not be sanctioned and welfare projects should be taken up and implementation should be expedited at the same time.
What the World Bank said
On September 15, 2022, the World Bank released a research report titled “Is the World Recession Coming?” from Washington.
According to the report, the economy of the three main driving forces of the world economy, the United States, China and Europe, is rapidly losing momentum. As a result, a recession may occur in the coming year.
“As central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging market and developing economies that would do them lasting harm,” according to a comprehensive study by the World Bank.
The concern of World Bank in this regard has become a matter of concern for countries like Bangladesh. Because the global organization says that the economic consequences of this possible recession will mainly be in emerging markets and developing countries.
What challenges may Bangladesh face
In addition to the press conference, the prime minister in her recent speeches has also hinted at a possible economic recession in 2023, mainly pointing to the food crisis.
Even in some of the Bangladeshi events in the United States, she advised the countrymen to grow crops on their unused land.
Professor Sayema Haque Bidisha of the Department of Economics, Dhaka University, in an interview with the BBC Bangla said, “Bangladesh will have to face several challenges. These are: Export earnings may decrease, the price of imported food products will increase, and remittances may decrease.”
If the prices of fuel fall in the global market during the recession, the country’s market will be coordinated with it, she said.
“If the global economy slows down, it will affect Bangladesh’s exports because the demand for ready-made garments will decrease. But if we proceed properly, it will be possible to tackle the situation after taking some measures,” she added.
According to her, the majority of expatriate workers in Bangladesh are in oil-rich Middle Eastern countries, but the global recession can also affect those countries.
“Because, if the growth in the exports of the Middle Eastern companies to the Western counties come down to low, these companies will suffer heavily. Besides, the big challenge for
Bangladesh will be the price of food products as it has to import many food products.
“If there is a global recession, it will have an impact on food inflation. The prices of imported goods will go up,” she told BBC Bangla.
But, if oil prices come down in the global market, it may be a source of some relief, she hoped.
However, if the overall export income of the country decreases and the import income increase due to the impact of the possible global recession, there may be a dollar crisis again like this year.
The common people will be relieved if the price of fuel falls and if it can be adjusted intelligently in the Bangladesh market, she opined.
However, she thinks that it is somewhat easier to deal with the pressure of recession if the ancillary measures including incentives to agriculture and remittances are taken properly. At the same time, it may be necessary to take measures similar to the way imports have been controlled to deal with the dollar crisis this year.
The writer is a Dhaka-based journalist and can be contacted at [email protected]
