According to the International Monetary Fund (IMF), The Global Economy is set to contract by 4.9 percent in 2020—with the IMF saying in its June report that this “baseline projection rests on key assumptions about the fallout from the pandemic,” says an article published in Daily Star.
The Covid 19 has created many downsides in society, especially in the World Economy. The Indian economy is estimated to shrink by 10.3 percent, Sri Lanka’s by 4.6 percent, and Pakistan’s by 0.4 percent.
Impact of Pandemic in Bangladesh
According to the Bangladesh Institute of Development, the country’s per capita income is predicted to fall by 2.9 percent—the pandemic has resulted in 13 percent of people losing their jobs and a drop in household income, forcing 16.4 million more people into poverty.
Manufacturing growth has also slowed to 5.84 percent from 14.2 percent as in 2019. The foreign direct investment (FDI) fell by 31.79 percent to USD 1.15 billion in the year’s first half. Yet, Bangladesh is performing better than much of the rest of the world at this time of crisis.
The IMF predicts that Bangladesh will beat the odds and raise its GDP by 3.8 percent- which is remarkable.
Experts say the government’s earlier-in-the-year shutdown, which ended in June, wiped out half of the previous fiscal year’s GDP growth potential.
Zahid Hussain, a former chief economist at the World Bank’s Dhaka office stated, “The second wave would be more painful than the first one, and it would rub salt into the wound. “Therefore, he believes it to “be a wise strategy for the government to avoid the second wave instead of looking at whether the economy can bear it or not.”
According to Dr. Fahmida Khatun, Executive Director of the Centre for Policy Dialogue, a significant second wave would further postpone any economic recovery and open the way for low business activity, reducing tax collection by the National Board of Revenue. As a result of these factors, the authorities should ensure that people obey health and safety regulations and equip hospitals with all necessary amenities to deliver quality healthcare to the public.
The government’s initiatives
The government has launched several programs in various sections of society. However, Except for the RMG sector, none of the other industries had benefited from the government’s policies.
“The government needs to find out why the stimulus packages for the CMSMEs failed to deliver the expected results and take appropriate measures to ensure that every penny of public money is well spent.”, said Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre.
The government has started implementing 19 stimulus packages totaling USD 12 billion (or 3.7 percent of GDP) to assist export-oriented companies, shipment credit, the agricultural sector, and low-income groups like farmers and micro and small businesses.
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Source: Daily Star
