Bangladesh economy shows signs of recovery in FY21

By SM Najmus Sakib

DHAKA, Bangladesh (AA) – Despite the pandemic uncertainty, Bangladesh’s economy has shown nascent signs of recovery backed by a rebound in exports and high remittance inflows in the first half of Financial Year 2021 (FY21), says a World Bank report released on Monday.

The economy is steadily recovering after being heavily impacted by the COVID-19 pandemic, which hampered growth and reversed the poverty reduction trend for the first time in two decades, the report said.

Recent surveys in Dhaka and Chittagong, the country's two largest cities, indicated a labor market recovery in the first half of FY21, with gradual restoration of livelihoods and improved food security in poor and slum areas, it said.

Khandker Golam Moazzem, senior research fellow at the Centre for Policy Dialogue (CPD), an economic think tank, described the report and signs of early recovery as a positive outcome despite the pandemic.

“Agricultural sector, export-oriented industries and service sectors are behind the recovery. And, considering the number of risks in the pandemic since June 2020, the government allowed economic activities to resume, which played a positive role in the recovery,” he told Anadolu Agency.

“Government stimulus, social safety package and others have largely contributed to the early recovery, and the same stimulus packages are needed in the second wave of the pandemic to keep the economic flow alive, precisely during the forthcoming nationwide lockdown from April 14,” he continued.

Running economic activities on a limited scale while minimizing health risk is a challenge in order to keep the recovery continuing, he said, adding: “We can keep the recovery uninterrupted as global markets remain open.”

“Despite the uncertainty created by COVID-19, the outlook for Bangladesh’s economy is positive. Much of the pace of recovery will depend on how fast mass vaccination can be achieved,” Mercy Miyang Tembon, World Bank director for Bangladesh and Bhutan, said in the report.

“The World Bank will support a resilient recovery, helping Bangladesh achieve green, smart, and inclusive growth,” he added.

The Bangladesh Development Update is a companion piece to the South Asia Economic Focus, a twice-a-year World Bank report that examines economic developments and prospects in South Asia, and analyzes policy challenges faced by countries.

Industrial sector output declined sharply in FY20 and recovered in FY21. Apparel production fell by 16.8% in FY20 as international orders were suspended, it showed.

Meanwhile, Bangladesh will receive 68 million more COVID-19 vaccines under the COVAX initiative beginning in May 2021, said World Bank. Bangladesh received initial shipments of 7 million doses from India. A further 25 million doses have been procured from India, it added.