Bangladesh economy moves towards recovery in FY21

Despite the Covid-19 pandemic uncertainty_ Bangladesh s economy has shown nascent signs of recovery backed by a rebound in exports and high remittance inflows in the first half of Financial Year 2021 (FY21)_ says a World Bank report.

The economy is steadily recovering after being heavily impacted by the Coronavirus_ which hampered growth and reversed the poverty reduction trend for the first time in two decades_ the report said.

Recent surveys in Dhaka and Chittagong_ the country's two largest cities_ indicated a labor market recovery in the first half of FY21_ with gradual restoration of livelihoods and improved food security in poor and slum areas_ it said.

Khandker Golam Moazzem_ senior research fellow at the Centre for Policy Dialogue (CPD)_ an economic think tank_ described the report and signs of early recovery as a positive outcome despite the pandemic.

 Agricultural sector_ export-oriented industries and service sectors are behind the recovery. And_ considering the number of risks in the pandemic since June 2020_ the government allowed economic activities to resume_ which played a positive role in the recovery_ he told.

 Government stimulus_ social safety package and others have largely contributed to the early recovery_ and the same stimulus packages are needed in the second wave of the pandemic to keep the economic flow alive_ precisely during the forthcoming nationwide lockdown from April 14_ he continued.

Running economic activities on a limited scale while minimizing health risk is a challenge in order to keep the recovery continuing_ he said_ adding:  We can keep the recovery uninterrupted as global markets remain open.

 Despite the uncertainty created by COVID-19_ the outlook for Bangladesh s economy is positive. Much of the pace of recovery will depend on how fast mass vaccination can be achieved_ Mercy Miyang Tembon_ World Bank director for Bangladesh and Bhutan_ said in the report.

 The World Bank will support a resilient recovery_ helping Bangladesh achieve green_ smart_ and inclusive growth_ he added.

The Bangladesh Development Update is a companion piece to the South Asia Economic Focus_ a twice-a-year World Bank report that examines economic developments and prospects in South Asia_ and analyzes policy challenges faced by countries.

Industrial sector output declined sharply in FY20 and recovered in FY21. Apparel production fell by 16.8% in FY20 as international orders were suspended_ it showed.

Meanwhile_ Bangladesh will receive 68 million more COVID-19 vaccines under the COVAX initiative beginning in May 2021_ said World Bank. Bangladesh received initial shipments of 7 million doses from India. A further 25 million doses have been procured from India_ it added.