For Bangladesh, 2020 began with plenty of cause for optimism against the backdrop of political stability coupled with a burgeoning economy. But a deadly virus, almost unheard of before the start of the year, quickly intensified into a full-blown pandemic that upended daily life in unprecedented ways.
The coronavirus pandemic brought the economy to its knees even before the first quarter of the fiscal year ended with numerous shutdowns and job losses painting a grim short-term outlook.
Although there have since been signs of a recovery in the final quarter, a second wave of the outbreak, which has already been trampling the country’s most important markets such as the US and Europe, still poses a grave threat. Bangladesh, therefore, is set to ring in the New Year with many of the same concerns from 2020.
A series of timely initiatives taken by the government of Prime Minister Sheikh Hasina has helped the country cushion the economy from ill-effects of the pandemic. Incentive packages worth Tk 1.25 trillion played a major role in keeping the economy rolling.
The business community, as well as economists, see a ray of hope in the news that the newly-developed coronavirus vaccine doses are arriving in the country soon while the US and Europe have begun inoculating their people. It is, however, still difficult to say when the situation will go back to normal, but they are sure about one thing – the main focus in 2021 will be on ways to bring the country’s economy back on track.
And for this, the government should pay attention to different kinds of economic reforms, according to Ahsan H Mansur, executive director of Policy Research Institute.
“We need to give the necessary medication to the economy in order to keep it healthy. I mean economic reforms are a must. Especially, large-scale reforms are needed to ensure greater revenue collection. Strong measures are needed to bring back discipline in the banking sector,” he said.
Bangladesh has targeted an 8.2 percent GDP growth in fiscal 2019-20 after smooth progress to 8.15 percent in 2018-19. The economy, however, suffered a huge setback due to a stagnant global market and a two-month nationwide lockdown in a bid to prevent the spread of the coronavirus.
Bangladesh has reported 5.24 percent GDP growth in FY20 with the coronavirus pandemic ravaging the economy for at least a third of the financial year, according to the Bureau of Statistics. Many analysts believe that the figure was much lower.
With the economy almost fully reopened, the government has stuck by its annual GDP growth target of 8.2 percent in FY21.
International agencies are not so optimistic. The World Bank in a forecast in October said the pandemic may push the country’s economic growth down to as low as 1.6 percent in 2020-21 and 3.4 percent in 2021-22.
Bangladesh’s gross domestic product would grow by 6.8 percent in FY21 as its economy has begun to turn around, the Asian Development Bank predicts.
The first six months of the fiscal year were “okay,” said analyst Mansur. But Bangladesh “can never” achieve an 8.2 percent GDP growth unless some big development is made, he said.
“I can say it clearly that it will be a great achievement if Bangladesh can post 5 percent growth amid this tough time. Many countries will fail to achieve even this much growth.”
One of the economic issues in focus in the year was an International Monetary Fund forecast that Bangladesh’s per capita GDP will be higher than India’s.
