Kazi Zahidul Hasan :
Coronavirus will have an adverse impact on Bangladesh economy like the way the pandemic has taken its toll on the global markets and the economies, opined economic analysts on Monday.
They said that the raging outbreak of new virus already disrupted global supply of goods, erodes global demand, collapsed oil prices and crashed global stocks will increase uncertainty over Bangladesh economy further when its key growth pillars was under stress.
“Even before the coronavirus outbreak, dark clouds had been gathering over the Bangladesh economy owing to various challenges in domestic and externals fronts, and now it has to contend with the virus that would directly hurt several industrial sectors. While the exact effect of the coronavirus is unknown, it is clear that the fallout would be huge on local economy if the pandemic prolongs,” Dr Ahsan H Mansur, Executive Director of Policy Research Institute, Bangladesh, told The New Nation.
He said the immediate impact of the virus outbreak has seen on exports and imports, manufacturing activities, labour migration, businesses, aviation and service sectors. Panic also gripped the stock investors making equity markets highly volatile.
“Remittance was the only bright spot for the economy so far. But it also lost momentum owing to coronavirus outbreak in Gulf States. So, the aforementioned shocks would simply undermine the economic growth and job prospect,” said economist Ahsan Mansur, adding, “In this scenario, policymakers should therefore immediately undertake a number of steps to address the economic fallout from the virus.”
However, he said, falling oil prices could be a silver
lining for Bangladesh economy on the onset of global uncertainly, caused by the coronavirus outbreak.
“Falling energy prices could reduce Bangladesh’s inflation and lower the cost of its import bills. That could, in turn, help narrow the country’s trade and current account deficits,” he noted.
The deadly new coronavirus could cost the global economy between $1.0 and $2.0 trillion this year, according to a report of UN Conference on Trade, Investment and Development (UNCTAD).
With Bangladesh’s economy highly depend on China, it is apprehended that the coronavirus outbreak may have serious implications for Bangladesh. UNCTAD has forecasted that if Bangladesh’s imports of intermediate inputs from China decline by 2 per cent due to the coronavirus, it will cost Bangladesh USD 16 million. The leather sector will lose USD 15 million. The textile and apparel sector will experience a loss of USD 1 million.
“Bangladesh’s economy is also integrated with the global economy. The degree of trade openness in the economy is currently 38.24 per cent. Countries such as Canada, the US, and the European Union are major export destinations for Bangladesh. Middle Eastern and South East Asian countries are sources of Bangladesh’s remittances. So, economic effects on those countries will also have significant consequences for Bangladesh,” opined Dr Fahmida Khatun, an Executive Director at the Centre for Policy Dialogue (CPD).
As the economic fallout of the coronavirus outbreak cannot be avoided if policymakers take immediate measures to minimise the losses, she said.
“The government should take all precautionary measures to control the spread of the outbreak and announce a ‘stimulus package’ to offset the coronavirus impact on domestic economy.”
Dr Fahmida Khatun also stressed the need for boosting public expenditure to keep economy rolling. Low-income group and the poor people should also be supported through expanded social safety nets.
The ADB has estimated that Bangladesh will lose about 1.1 per cent of its GDP in the worst-case scenario — when the outbreak will last at least for six months. It implies that coronavirus can take away USD 3.02 billion from Bangladesh’s economy. Additionally, it is also being apprehended that there could be 894,930 job losses due to a global economic downturn.
Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said, “The virus will most directly shape economic losses through supply chain disruption, fall in external trade, share market crash, shaky investors’ sentiment and passive household consumption.”
To put the economy on steady footing, he recommended that the government should engage in fiscal stimulus and embrace necessary policy actions in response to the coronavirus.
“Outbreak of the virus sparks repercussion on manufacturing sector, share market, businesses, and foreign trade,” said former adviser to the caretaker government Dr AB Mirza Azizul Islam.
Besides, activities of several infrastructure projects in Bangladesh, which are being implemented by the Chinese construction firms and Chinese workers, have slowed down due to COVID-19. This may lead to time and cost over-run of these projects causing economic losses for Bangladesh, he added.
Mirza Aziz opined that the risks to the economy from the spread of the virus can be contained if the government acts quickly and communicate its actions clearly to stimulate the economy. Necessary policy measures should also be taken to calm financial markets.
Coronavirus will have an adverse impact on Bangladesh economy like the way the pandemic has taken its toll on the global markets and the economies, opined economic analysts on Monday.
They said that the raging outbreak of new virus already disrupted global supply of goods, erodes global demand, collapsed oil prices and crashed global stocks will increase uncertainty over Bangladesh economy further when its key growth pillars was under stress.
“Even before the coronavirus outbreak, dark clouds had been gathering over the Bangladesh economy owing to various challenges in domestic and externals fronts, and now it has to contend with the virus that would directly hurt several industrial sectors. While the exact effect of the coronavirus is unknown, it is clear that the fallout would be huge on local economy if the pandemic prolongs,” Dr Ahsan H Mansur, Executive Director of Policy Research Institute, Bangladesh, told The New Nation.
He said the immediate impact of the virus outbreak has seen on exports and imports, manufacturing activities, labour migration, businesses, aviation and service sectors. Panic also gripped the stock investors making equity markets highly volatile.
“Remittance was the only bright spot for the economy so far. But it also lost momentum owing to coronavirus outbreak in Gulf States. So, the aforementioned shocks would simply undermine the economic growth and job prospect,” said economist Ahsan Mansur, adding, “In this scenario, policymakers should therefore immediately undertake a number of steps to address the economic fallout from the virus.”
However, he said, falling oil prices could be a silver
lining for Bangladesh economy on the onset of global uncertainly, caused by the coronavirus outbreak.
“Falling energy prices could reduce Bangladesh’s inflation and lower the cost of its import bills. That could, in turn, help narrow the country’s trade and current account deficits,” he noted.
The deadly new coronavirus could cost the global economy between $1.0 and $2.0 trillion this year, according to a report of UN Conference on Trade, Investment and Development (UNCTAD).
With Bangladesh’s economy highly depend on China, it is apprehended that the coronavirus outbreak may have serious implications for Bangladesh. UNCTAD has forecasted that if Bangladesh’s imports of intermediate inputs from China decline by 2 per cent due to the coronavirus, it will cost Bangladesh USD 16 million. The leather sector will lose USD 15 million. The textile and apparel sector will experience a loss of USD 1 million.
“Bangladesh’s economy is also integrated with the global economy. The degree of trade openness in the economy is currently 38.24 per cent. Countries such as Canada, the US, and the European Union are major export destinations for Bangladesh. Middle Eastern and South East Asian countries are sources of Bangladesh’s remittances. So, economic effects on those countries will also have significant consequences for Bangladesh,” opined Dr Fahmida Khatun, an Executive Director at the Centre for Policy Dialogue (CPD).
As the economic fallout of the coronavirus outbreak cannot be avoided if policymakers take immediate measures to minimise the losses, she said.
“The government should take all precautionary measures to control the spread of the outbreak and announce a ‘stimulus package’ to offset the coronavirus impact on domestic economy.”
Dr Fahmida Khatun also stressed the need for boosting public expenditure to keep economy rolling. Low-income group and the poor people should also be supported through expanded social safety nets.
The ADB has estimated that Bangladesh will lose about 1.1 per cent of its GDP in the worst-case scenario — when the outbreak will last at least for six months. It implies that coronavirus can take away USD 3.02 billion from Bangladesh’s economy. Additionally, it is also being apprehended that there could be 894,930 job losses due to a global economic downturn.
Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said, “The virus will most directly shape economic losses through supply chain disruption, fall in external trade, share market crash, shaky investors’ sentiment and passive household consumption.”
To put the economy on steady footing, he recommended that the government should engage in fiscal stimulus and embrace necessary policy actions in response to the coronavirus.
“Outbreak of the virus sparks repercussion on manufacturing sector, share market, businesses, and foreign trade,” said former adviser to the caretaker government Dr AB Mirza Azizul Islam.
Besides, activities of several infrastructure projects in Bangladesh, which are being implemented by the Chinese construction firms and Chinese workers, have slowed down due to COVID-19. This may lead to time and cost over-run of these projects causing economic losses for Bangladesh, he added.
Mirza Aziz opined that the risks to the economy from the spread of the virus can be contained if the government acts quickly and communicate its actions clearly to stimulate the economy. Necessary policy measures should also be taken to calm financial markets.
