Coronavirus stalls economy

Falling exports and remittance inflow against production disruptions in mills and factories and the halt to transport movement and operation of financial entities due to the coronavirus outbreak have stalled the country’s economy threatening to cause the GDP growth to hit a decade low.

Experts said that the income from the readymade garment export accounting for over 80 per cent of the county’s overall export earnings plunged by almost 85 per cent in April this year to $366.58 million from $2.42 billion in the same month of 2019 due to the shutdown in the country since March 26 and in other countries for tackling the virus.

April’s remittance inflow decreased by 24.63 per cent to $1.08 billion from $1.43 billion the same month last year severely affecting the overall economic growth, they said.

Planning minister MA Mannan said that the GDP growth of 2 per cent in the outgoing fiscal year, projected by the International Monetary Fund and the World Bank, was not acceptable.

He said that the agricultural sector would once again prove to be vital for economic growth, now amid the adverse impacts of the ongoing coronavirus pandemic.

There is an expectation of a bumper harvest of the boro paddy, the single biggest cereal crop of the county, he told New Age.

Former Bangladesh Bank governor Salehuddin Ahmed, however, said that the growth would be over 5 per cent.

On the other hand, former World Bank Bangladesh lead economist Zahid Hussain said that the growth projected by the IMF and the WB was realistic since the revenue collection shortfall would cross Tk1 lakh crore.

The falling demand for consumer goods has become acute as the government could not sustain the purchasing power of the majority population engaged in the informal sector, he added.

The purchasing power of some six crore people engaged in the informal sector drastically fell as they have become jobless, said Centre for Policy Dialogue distinguished fellow Mustafizur Rahman.

Many small entrepreneurs and traders are at the risk of losing their business capital, he said.  

The government has announced a number of measures, including sanctioning Tk 760 crore for the urban poor like day labuorers, rickshaw and rickshaw-van pullers, motor workers, construction workers, newspaper hawkers, hotel and restaurant workers.

But the nitty-gritty of how the fund will be distributed is yet to be completed while stimulus packages worth over Tk 67,000 crore will be given as loan to industries, SMEs and service sectors.

Anu Muhammad, professor of economics at Jahangirnagar University, said that the packages were designed to benefit only the bankers and the industrialists but not the farmers and the workers in the informal sectors.

The distribution of rice at subsidised prices among poor to maintain food security has now remained suspended on the grounds of misappropriation of the sanctioned item.

Finance ministry officials are busy with dealing with the budget deficit that according to the WB and the IMF would cross seven per cent from the projected five per cent.

Finance minister AHM Mustafa Kamal has already asked donor agencies for higher support to meet the budget deficit against the revenue shortfall that is likely to cross Tk 1 lakh crore or over 3.5 per cent of the GDP.

News Courtesy: www.newagebd.net