Country's economy showing signs of recovery: MCCI

Published : 11 Oct 2021 08:50 PM | Updated : 12 Oct 2021 11:29 AM

Bangladesh’s economy is showing signs of recovery during the second half of FY21. After achieving above 7.0 per cent growth since FY16 to three consecutive fiscal years, GDP growth reached 8.15 per cent in FY19 which was praised worldwide, said a report, titled 'The Bangladesh’s Economy During FY2020-21 (FY21)' released by Metropolitan Chamber of Commerce and Industry (MCCI) on Monday.

The report said that the stimulus packages comfort the business groups, from large farms to petty micro-enterprises, which eventually helped the economy to boost again. Though the recovery period is uncertain, but much depends on vaccination and the strength of the global economy. Non availability of mass vaccination may appear to be one of the critical factors for slower economic recovery. 

According to Bangladesh’s Economy During FY21 Economic Growth In terms of US Dollar, the value of GDP in current market prices increased by 9.88 per cent to US$355,037 million in FY21 from US$323,111 million in the previous fiscal year. Per capita GDP stood at US$2,097 in FY21, compared to US$1,930 in FY20, showing an increase of 8.65 per cent. Per capita GNI also increased to US$2,227 in FY21 from US$2,024 in the previous fiscal year.

Despite the slower economic activities caused mainly by COVID-19, the industry sector recorded a growth of 6.12 per cent in FY21, compared to 3.25 per cent in FY20 while the share of the industry sector in GDP increased by 0.21 percentage points to 34.99 per cent in FY21 from 34.78 per cent in FY20. 

Within the broad industry sector, the manufacturing sub-sector recorded a growth of 5.77 per cent in FY21, compared to the previous fiscal year’s 1.80 per cent. Within manufacturing, the large and medium scale industries sub-sector grew by 6.56 per cent in FY21, compared to 1.39 per cent in FY20. 

The small scale manufacturing industries grew lower rate at 1.73 per cent in FY21 against 3.96 per cent in FY20. However, the share of the manufacturing sub-sector in GDP increased Bangladesh’s Economy During FY21 13 to 23.66 per cent in FY21 from 23.59 per cent in the previous fiscal year. 

Within manufacturing, the share of the large and medium scale industries sub-sector in GDP year-on-year rose to 19.92 per cent in FY21 from 19.72 per cent, while small scale industries sub-sector decreased to 3.73 per cent from 3.87 per cent. 

Initially, the central bank provided Tk 300 billion of the first phase for large industries and service sector business entities on 5 April 2020. Additional Tk 30 billion was added to this package to pay wages of workers for July 2020. Then working capital facilities were enhanced further to Tk 400 billion from the previous Tk 330 billion as the second phase. 

The second phase started after 98 per cent implementation of the first phase as on 30 June 2021, according to BB. Implementation process of the second phase of the stimulus package has started with the inclusion of foreign-owned companies operating in Bangladesh.

The central bank has already sent limits to all scheduled banks, like the previous year, for execution of the second phase to help revamp the coronavirus-hit economy. 

The borrowers, who availed assistance from the first phase, would not be eligible for the second phase in line with the BB’s policy.