Clicky
National, Back Page

Shutdown to shrink GDP

Govt, businesspeople should work together, experts say


Published : 09 May 2020 09:28 PM | Updated : 28 Aug 2020 09:30 AM

The country’s Gross Domestic Product (GDP) will see a drop-off due to the ongoing shutdown for coronavirus pandemic as all global supply chains are heavily disrupted, experts opined.

This will hit hard the county's export, remittance and foreign direct investment, and therefore the businesspeople and the government will have to work together to overcome the overall economic shock, they added.

They further said amid the mounting death toll and global economic fallout triggered by the COVID-19 pandemic, Bangladesh and other South Asian governments must ramp up action to curb the health emergency, protect their people, especially the poorest and most vulnerable, and set the stage now for fast economic recovery, which the World Bank has said in its twice-a-year regional update.

The World Bank report also said that regional growth will fall between 1.8 and 2.8 percent in 2020, down from 6.3 percent projected six months ago.

That would be the region’s worst performance in the last 40 years, with temporary contractions in all South Asian countries.
Eminent economist Zahid Hussain told Bangladesh post, “The outbreak of the coronavirus in the world has dealt a heavy 

blow to the global economy, which may also affect the economy of Bangladesh.”
Bangladesh is going to face many challenges as coronavirus has broken almost all activities of the country, he added.
Covid-19 has affected Bangladesh’s export and import, remittances and foreign direct investment, which ultimately will affect negatively on economy,” he said.

He said that most of the workers of Bangladesh anticipating losing their jobs as many companies have temporarily been closed while many small traders have been passing critical time amid the shutdown.

So, the government should immediately provide cash incentives for managing the crisis, he added.
“However, the work of mega projects should be completed quickly. This will play a positive role in the post-corona economic progress, he opined.

To minimize short-term economic sufferings, the World Bank has called for establishing temporary work programmes for unemployed migrant workers, enacting debt relief measures for businesses and individuals, and easing inter-regional customs clearance to speed up import and export of essential goods.

Once lockdown restrictions are loosened, South Asian governments should adopt expansionary fiscal policies combined with monetary stimulus to keep credit flowing in their economies, the WB report said, adding that since many South Asian countries have limited fiscal space, these policies should target people worst hit by the freeze on economic activity.

The report urges governments to adopt temporary spending measures and coordinate with international financial partners to avoid unsustainable long-term debt levels and fiscal deficits.