Bangladesh economy faces a fresh blow: MCCI

Bangladesh's economy is facing yet another blow due to the resurgence of Covid-19, the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) has said. The economy showed signs of recovery in the third quarter (Q3) of fiscal year 2020-21, it added.

Bangladesh was unexpectedly hit by the second wave of coronavirus with a gradual increase in daily positivity rates just when it was hoping to move at full speed towards recovery from the fallout, the MCCI cited.

In its quarterly review for January-March 2021, the chamber said coronavirus lockdown once again brought back disruptions to the lives and livelihoods of people with the resultant uncertainty for economy.

Global lockdowns and economic stagnation as well as a 66-day public holiday initially in Bangladesh due to the outbreak of Covid-19 led to a disruption to the country's economic activity.

But the country's economy had been showing signs of recovery in Q3 of FY21, according to the country's one of the oldest trade bodies.

Financially and socially vulnerable people were mostly impacted during the outbreak of the plague, it stated.

However, the government's stimulus packages provided much-needed support to businesses at various levels.

The vaccination campaign also partially addressed the fear of the pandemic, it mentioned.

"As a result, lockdown was lifted, economic activity started recovering to the pre-pandemic level and health emergency alerts were lowered during the quarter under review," said the MCCI.

The stimulus package comforted business groups, from large farms to petty micro-enterprises, which eventually helped the economy reboot, it mentioned.

Export and remittance -- two important economic drivers -- did well amid the pandemic, the MCCI said.

Inward remittance had a huge positive impact on rural economy to sustain the domestic consumption demand, which has multiplier effects on other economic sectors, especially the small and medium industry.

Inflation rate remained under control and foreign-currency reserve was in a satisfactory position.

Exchange rate had long been stable while the current account and balance of payments account are also in positive trajectory.

On the other side, some of the key economic indicators appear to be less promising than projected earlier, said the MCCI quarterly review.

"The fiscal framework continues to be weak in view of poor achievements, more specifically, both in terms of revenue mobilization and public expenditure," it said.

Also terming unemployment situation and low investment challenging areas, the MCCI said there is a need for enhancing both public and private investment to maintain competitiveness and generate further growth.

In its own projections on some economic indicators, the MCCI said the country's export, import and inward remittance are expected to go up at the end of June.

Export earnings might reach $3,630 million at the end of June from $3108 million in May and import payments would also rise to $6650 million from $6490 million.

On the other hand, the volume of remittance might go up to $2,280 million during the period in question from around $2,171 million in May, projected the MCCI.