Covid-19 and the Bangladesh Economy: Nature of the Downturn and Prospects for Recovery

NAZNEEN AHMED, Ph. D.Senior Research Fellow Bangladesh Institute of Development studies

The gross domestic product (GDP) of Bangladesh had been growing at a respectable rate of more than 6 percent since Fiscal Year (FY) 2010-11 while the growth rate reached 8.1 percent in 2018-19. The national budget 2019-20 forecasted economic growth of 8.2 percent. However, the Bangladesh economy could not achieve that target due to a massive economic downturn from the worldwide outbreak of the Covid-19 pandemic. The GDP growth was 5.2 percent in 2019-20.

antidote or the medicine is not available in the market by the anticipated time. The following issues need to be taken seriously when the recovery phase begins.• Allocation of funds to vaccinate all, particularly including the poor people.• Regular monitoring the status of the enterprises that have taken credit from various stimulus packages. Banks should be encouraged to provide proper business guidelines, especially for the enterprises struggling to bounce back.• Encouraging new entrepreneurs and businesses. Skill enhancing training programmes should be expanded to workers of various industries. Ensuring easy access for the small and the medium enterprises to loans from banks and other financial institutions. In this connection, regulations on the number of guarantors, requirements of documents, etc., would require to be made easier, especially for women entrepreneurs.

Progress phase (FY 2022-23)

The economy should move faster than the pre-COVID situation at this phase to cover the loss incurred during the pandemic. The following issues should get priority at this stage.• Focusing on the implementation of various projects, including mega projects.• Undertaking more training programmes for skilled human resources.

• Government support for the expansion of e-commerce and mobile financial services. Creating new fintech facilities for enabling rural producers to access the urban market.

• Small and medium enterprises should get support to expand their markets beyond the border. In addition to the export of ready-made garments, leather and leather goods, footwear and other regular products, support should be given to expanding the export of other products, including pharmaceutical products. Prompt actions, need-based allocation of resources, flexible regulatory supports, together with a people-centric humane attitude at all administrative and political entities, would surely allow Bangladesh to bounce back from the COVID-19 economic crises.