The Asian Development Bank (ADB) has forecast a 5.5- 6 percent GDP growth for Bangladesh in the current fiscal.
However, the Manila-based lender added a rider, saying the spike in coronavirus infection and delays in supply of vaccines, both globally and domestically, could undermine the economic growth outlook.
On the other hand, the country’s GDP growth can further strengthen to 7.2 percent in fiscal 2022 under sustained global recovery and effective Covid-19 management,.
Presenting the latestADB report Asian Development Outlook (ADO) 2021, they agency’s senior economist Soon Chan Hong said it would provide USD 940 million loan to Bangladesh to procure Covid-19 vaccine that’s under process.
“ADB has already supported USD 500 million to fund immediate expenditures and programmes for expansion of social safety nets and support to industries to protect jobs.
“Besides, for economic restoration and job preservation/creation, we will provide USD 50 million loan to help restore economic activities of the microenterprises and USD150 million loan to support self-employment and employment generation of unemployed youth, micro entrepreneurs, and returnee migrants (under process),” Hong said.
ADB’s Country Director Manmohan Parkash said compared to many developed countries in North America and Europe, and other developing countries in Asia and the Pacific, the acuteness of the pandemic was less severe in Bangladesh during the first wave in 2020.
“Bangladesh coped reasonably well against the pandemic and the economy showed early signs of recovery. Through FY2020 GDP growth plummeted to an estimated 5.2 percent from 8.2 percent in the previous year.
“It picked up in subsequent months supported by stimulus package implementation and recovery in global growth and world trade,” Parkash said in a statement.
Record remittance inflow kept domestic demand buoyant and underpinned solid growth in private consumption.
Unemployment, which had increased to 22.4 percent in April-July 2020, dropped sharply to 3.8 percent in September with stimulus package implementation and broad resumption of economic activity, ADB said.
On the supply side, growth in the agriculture, industry, and service sector picked up. Medium-sized and large manufacturers
reversed production volume contraction by 16.4 percent in fourth quarter 2020-2021.
The potential slowdown in vaccination due to supply-related issues may further exacerbate the already adverse situation.
Moreover, the impact of the second wave in export-destination countries could also undermine economic recovery.
Revenue collection may also be higher than last year. Inflation is expected to be manageable in the range of 5.5 to 6 percent.
Parkash said attaining the targets of development and other spending could be challenging as revenue collection in the first eight months of FY2021 grew by only 5.2 percent compared to 9.1 percent growth in the same period a year earlier.