Economy showing signs of recovery

Bangladesh's economy has been showing signs of recovery ever since the fourth quarter of fiscal 2020-21 despite facing various challenges amidst the ongoing Covid-19 pandemic, according to a quarterly analysis by the Metropolitan Chamber of Commerce and Industry (MCCI).

The government's stimulus packages eased the suffering of numerous industries, from large firms to micro-enterprises, which eventually gave a boost to the economy, it said.

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Besides, Bangladesh has done well in terms of export and inward remittance, two important drivers of the country's economy, amid the Covid-19 crisis.

So, it can be said that robust remittance and export earnings facilitated Bangladesh's economic recovery in the just concluded fiscal year.

Exports grew by about 15 per cent while remittance ballooned by 36.11 per cent year-on-year for the period, the MCCI said in its analysis, styled "Review of Economic Situation in Bangladesh: April-June of FY 2020-21".

The findings of the study were released yesterday.

Inward remittance has had a hugely positive impact on the rural economy as it helped sustain domestic demand.

This has had a multiplier effect on other economic sectors, especially the small-and-medium industry.

Moreover, inflation is under control while the foreign currency reserve is in a satisfactory position.

As such, the exchange rate has remained stable for some time now while the balance of payments is also in a positive trajectory, the MCCI said.

Bangladesh, like many other countries, struggled with the skyrocketing number of Covid-19 infections and subsequent measures to prevent its spread, such as social distancing and working from home amid the "new normal".

Ever since the coronavirus was first detected in the country on March 8, 2020, people from all socioeconomic backgrounds have been affected in one way or another.

The coronavirus fallout and recurring lockdowns since March last year has slightly pushed Bangladesh off its pre-pandemic growth trajectory.

And although the road to recovery remains uncertain, much depends on mass vaccination and the strength of the global economy.

The non-availability of vaccines on a massive scale may appear to be one of the critical factors behind Bangladesh's slower economic recovery.

Similarly, some of the economic indicators appear to be less promising than previously projected.

The fiscal framework continues to be weak in view of poor achievements, more specifically, both in terms of revenue mobilisation and public expenditure.

The unemployment situation and low investment is also a challenge.

So, a significant increase in public and private investment is necessary to maintain competitiveness and generate further growth.

The policymakers need to focus on strategies for a post-Covid recovery and concentrate on policies to upgrade various private sectors so that more successful revenue-earning streams can be generated and attract reinvestments.

All this may cushion the losses sustained during this pandemic period, the MCCI added.