The Asian Development Bank has estimated that the spillovers from global coronavirus pandemic could cost Bangladesh about 0.2 per cent to 0.4 per cent of gross domestic product, according to a report of the multinational lender.
‘If a significant outbreak occurs in Bangladesh, the impact could be more significant,’ said ADB country director Manmohan Parkash.
Parkash made the comment in the ADB’s latest report titled Asian Development Outlook 2020.
‘The outlook will be updated as more information becomes available,’ he said, adding, ‘To cope with and mitigate the impact of the pandemic, the ADB is committed to support and collaborate with Bangladesh.’
Appreciating the government’s recent interventions, Parkash said, ‘Addressing cash management challenges and broader resiliency issues due to coronavirus-related shutdowns and economic knock-ons could help minimise impact on Bangladesh economy.’
Due to the outbreak of pandemic in the country, the government has extended general holidays to 17 days from 10 days with a view to containing its spread, bringing the overall economic activities almost to a halt.
A total of 61 people have been tested positive for coronavirus and six people died of the disease in Bangladesh since the first cases confirmed in the country on March 8.
The number of confirmed coronavirus cases around the world has soared past one million and fatalities have topped 50,000 so far since the emergence in December last year.
The ADB, however, said that the country’s economy was expected to remain strong in the fiscal year of 2019-2020, with a strong GDP growth rate of 7.8 per cent. The forecast, however, did not include the downward risks of coronavirus outbreak.
The government, however, has targeted 8.2 per cent GDP growth for FY20.
The Manila-based lender also estimated that the country’s gross domestic product growth would be 8 per cent in FY21.
Commenting on the growth forecast, Parkash said that Bangladesh’s economy continued to perform well despite the global economic slowdown.
‘However, there exists a downward risk due to the coronavirus global pandemic,’ the ADB country director said.
During the first eight months of FY20, Bangladesh economy showed strong performance with growing domestic demand, supported by substantial increase in remittance inflow, said an ADB statement issued on Friday.
Economic activity is expected to accelerate with higher government development spending, higher imports of liquefied natural gas, oil and construction materials, favourable power production, and the government’s policy support to boost exports, it said.
However, the COVID-19 pandemic could hamper such trend due to disruptions in export demands, suppressed consumption, and curbed remittances, it cautioned.
In FY2021, private consumption will continue to drive growth, aided by continued strong remittances.
Inflation will stay in check in both year, FY20 and FY21, said the ADB, adding that low revenue mobilisation continued to be a key challenge for Bangladesh economy.
Revenues thus need to be raised significantly through comprehensive tax reforms, by expanding the tax base and making resource mobilisation more efficient to support much-needed public expenditure on infrastructure, health and social development, it said.
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