The economy is facing devastating damage in the country as well the whole world. It is inexorable the GDP gains that were expected to be realised in the current fiscal year are likely to be wiped out. The threat of a recession looms large, especially if the current situation is not resolved before the end of the fiscal year on June 30, 2020.
The Center for Policy Dialogue noted the global uncertainties will transmit through both production and trade channels to the domestic economy of Bangladesh. Export demand will reduce as buyers postpone or cancel their orders. Foreign direct investment is bound to decrease and portfolio investments may also shrink. , infuriating the bear market already gripping the country’s stock exchanges. Remittances are bound to be flow negatively due to job cuts, putting further pressure on country’s current account and its exchange rate. Official development assistance inflows also will putting downward pressures on the Annual Development Programme’s public investment.
Domestic uncertainties will cause entrepreneurs to left private investment, impacting employment and earnings in both formal and informal sectors. Supply chains will be disrupted and higher prices will be demanded. Most fundamentally, people will have less money to spend and consumer demand will contract.
Agriculture would stand to lose in excess of USD 600 million. Some 900,000 workers, in formal and informal employment, are at risk of losing their jobs.
It was estimated that the impact of a 40 percent output loss in the business and trade sector as well as the light/heavy manufacturing and utilities sectors during three months, as well as a 40 percent output loss in hotels, restaurants and transport services sectors for six months, starting from March 2020. Sectors which will take more time to recover—hotels, restaurants, transport and tourism—will throw a shadow over the prospects for the next fiscal year. Temporary employment loss in the formal and informal sectors may affect 8.5 percent of the total work force, that is, up to 6 million persons.
The light at the end of the tunnel
Our biggest hopes are coming from Shariatpur and Madaripur, home to the largest number of Italy migrants. Thousands of these migrants have returned home in recent months, some at the height of the Coronavirus pandemic in Lombardy, the richest Italian region and the epicentre of the Covid-19 outbreak. The overwhelming majority of these migrants made it back to their beautiful villages at least two weeks ago.
And so far there have been no major outbreak or traces of community transmission of the deadly virus in any of the villages or towns in these two districts. There were some concerns about an outbreak among several Italy returnees at Shibchar, a town in Madaripur. But it seemed the authorities have brought it under control after a harsh lockdown.
The Coronavirus situation in the two districts could be an indicator for the whole country. Still, we haven’t reached the shore yet. Two weeks of hard lockdown until the first day of Bengali new year and we’ll be fine.