The Bangladesh government revised downwards its gross domestic product (GDP) growth for the fiscal year 2019-20 [ July to June] to 3.51, almost 2 points less than the 5.25 percent that the government had maintained so far. The revised growth rate is the lowest the country had recorded in the last three decades, indicating that the economy had been hit harder by the pandemic than what was previously thought.

The Bangladesh Bureau of Statistics (BBS) released the final figures for the FY20 which showed the reality of the economic condition in the country. In the latter half of 2020, the situation started to improve as exports and remittances both swelled. However, the second wave of the Covid-19-- which has been wreaking havoc for over four months now--could dampen the prospect of recovery.   

For the Fiscal Year 2020-21, the country is expected to grow by 5.47 percent, based on the data the BBS collected between March-April. However, the provisional figure is likely to be impacted as the country went through several hard lockdowns--in some cases, major manufacturing factories were also closed--and the travel restrictions remained for most of the last four months.

The revised figure of FY 20 is closer to 3.8 percent predicted by the International Monetary Fund (IMF). Experts say the revised estimate is closer to reality.

The final data showed the manufacturing and service sector have been hit hard by the pandemic while the agriculture sector maintained its growth, and even surpassed the pre-pandemic figures.

The Industrial sector growth grew by 3.25 percent, a down from 12.67 percent the previous year. The service sector--which contributes to 51 percent of the GDP-- declined to 4.16 percent in FY 20, down from around 9 percent it reported the previous year.

Economist Zahid Hussain, speaking to the Daily Star newspaper, lauded the country for honestly revising the figure, which he said was not the case in the past. Despite the lowest growth in the last three decades, he said it is significant that the country managed to post positive growth at a time when the economy of the major countries contracted during the pandemic.

He opined that it was the resilience of the rural economy that saved Bangladesh.

Despite the recovery in all sectors in the FY21, the prolonged second wave of the Covid-19 is likely to have an impact on recovery. However, the record growth in remittances, around 36 percent, due to the increased usage of formal channels, will support the economy in hard times.

“A much better Covid-19 management will be key to accelerated and inclusive economic recovery in the days to come,” Hussain said, adding, “this may not be sufficient, but it certainly is necessary to keep the recovery going."

The current recovery, he warned, can’t be sustained if the community transmission couldn’t be reduced from its current level.

(SAM)