The economic impact of the coronavirus pandemic in Bangladesh has been hugely disruptive as in just two months, the country’s economy is projected to lose up to Tk 2.17 lakh crore due to devastation of this unseen enemy.
Predicting such a dismal economic picture, a Dhaka University (DU) study, prepared by a research team of the Institute of Health Economics (IHE) of the university, said the pandemic wiped out Tk 2.17 lakh crore from the country’s all sectors.
The loss is about 9 percent of the total the Gross Domestic Product (GDP) of the last financial year and per day the amount is Tk3300 crore, it said.
According to the study, if the lockdown is prolonged, the daily loss will increase. In the meantime, problem has been created at least in 14 sectors of the country. At the same time, Ramadan centric huge business activities are also nil. Traders are fearful of losses as they stockpile goods for sale during this month.
To this end, IHE department professor Syed Abdul Hamid told The Bangladesh Post that, “Through the study, we tried to calculate the losses of the short-term period of the internal economy of the country on the basis of GDP of 2018-2019. As our economy is festival centric, and this year Pohela Boishakh, Ramadan, Eid, and Buddha Purnima festivals could not be observed, the amount of the losses could not be included, as it could be higher with the extended holidays”.
“The estimated average current loss in agriculture, industry and services from March 26 to April 25, in this 31-day, is Tk 12300 crore. At the end of April, the amount stood at Tk 118800 crore as the lockdown continued”, he added.
About further calculation of the virus impact on the economy, he replied, “It seems like, the lockdown may continue till the end of May, in that case, the amount of loss will stand at Tk 217800 crore, which is nine percent of the country’s GDP”.
However, he advised finding new ways to ensure the smooth implementation of government incentive packages as well as to overcome the economic losses during the lockdown. According to him, if lockdown is extended, small scale manufacturing companies will not be able to survive. As a result, backward linkage and forward linkage chains in the domestic economy will be severely damaged.
Meanwhile, the World Bank in its "South Asia Economic Focus Spring 2020: A Cursed Blessing of Public Banks" report has said, economic growth will be between 2.0 and 3.0 percent in the current fiscal due to the hard hit of the pandemic coronavirus.
The report noted: "The uncertainties related to COVID-19 are likely to further dampen private investment. A shortage of intermediate inputs is expected to lower industrial production, while staff shortages could adversely impact all sectors."
The bank has also drawn a grim picture in fiscal management as it said the lower revenue collection and higher recurrent spending are likely to increase the fiscal deficit to 7.7 percent of GDP in FY2020.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has said buyers have so far canceled orders worth US$ 3 billion following the outbreak of coronavirus. If the export order cancellation trend continues, it could go up beyond imagination.
However, Prime Minister Sheikh Hasina has announced incentives of around Tk 1 lakh crore at different times to save the country from coronavirus injuries.
