Al Amin :
Business sentiment in Bangladesh is recovering slower than expected with a worrying sign that the bounce back from Covid-19 will take a long time.
In June 2020 Bangladesh’s private sector credit growth reached 8.61 per cent, lowest in the decade amid sluggish economic activities.
In July and August 2020, the private sector credit growth increased to 9.2 per cent and 9.36 per cent Y-o-Y respectively showing signs of improvement in overall business confidence of the country followed by nationwide pandemic shutdown.
But private sector credit growth came down to 8.61 per cent in October from 9.41 per cent in September amid a second wave of the new coronavirus infection at home and aboard.
Business leaders said, the easing of lockdown restrictions helped boost economic activities as well as improved business sentiment in all sectors. However, the renewed risks associated with the second coronavirus wave have again weakened the business sentiment creating an uncertainty over the recovery of the domestic economy to pre-pandemic levels, according to business leaders.
“Economic uncertainty and volatility are prevailing all over the world. Economy of many countries including India is still in negative territory, whereas Bangladesh economy continues to expand taking advantage of macroeconomic stability and the government’s fiscal measures. That means we are on recovering track,” former FBCCI President M Shafiul Islam Mohiuddin, MP, told the New Nation.
However, he said, the business sentiment in Bangladesh is recovering slower than expected due to uncertainty over the pandemic. This uncertainty is expected to prevail till a Covid-19 vaccine hits in the market. We have to wait six months more to see a full recovery in business sentiment,” he said.
Shams Mahmud, President of Dhaka Chamber of Commerce and Industries (DCCI) said that recovery of Bangladesh economic is slowing down from October as many countries have imposed lockdown again.
He also said, “In our internal economy, SME sector is likely to be victimized massively of the second wave of the pandemic. So, the government must take measures for the sector.”
“The economic impact of coronavirus is huge. The shutdowns enforced to tackle the pandemic pushed economic activity to unimaginable lows,” Dr Ahsan Mansur, an eminent economist of the country, told The New Nation.
He said Bangladesh economy shrank by a record 5.24 per cent in the in FY 1019-20 with the coronavirus pandemic ravaging the economy for at least a third of the financial year.
“While some level of normalcy is getting restored, it is too early to predict that this trend will continue as the countries around the globe, including Bangladesh, is again battling with fresh coronavirus wave,” he added.
When asked, Dr Ahsan Mansur, a former senior executive of International Monetary Fund (IMF) said, the downward trend of private sector credit growth suggests that the business confidence was not hopeful as much as it was expected. It improved slightly during the July-September quarter. But it seems to be eroded again amid uncertainty over renewed threat of the pandemic.
Dr Zahid Husein, former lead economist of the World Bank Dhaka office, said, “Our economy has recovered partially. Export sector is on positive territory but not with big margin. There is no growth in individual expenditure and investment sectors.”
“Amid the pandemic, the government should take initiatives to keep survive the institutions, especially for the SME sector. The government will have to take measures to face the pandemic,” he added.
