Prime Minister Sheikh Hasina warns of negative impact on economy

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Prime Minister Sheikh Hasina has warned the countrymen of the negative impacts on the economy due to the outbreak of the coronavirus pandemic.

Meanwhile, Import expenditure and export earnings fell by 5% from that in the same period of last fiscal year

Addressing a press briefing at Ganabhaban in Dhaka on Sunday, the prime minister described the adverse effects the country’s economy is currently suffering from and likely to suffer in the days ahead as the deadly virus has already hit hard the country’s financial sectors along with global ones.

Although the premier said that the time is yet to come when it can be specifically said how much the economy will suffer, she identified some possible sectors and businesses that might be affected by the Covid-19.

Economic loss

Mentioning that the Asian Development Bank (ADB), in its preliminary estimate, indicated the economic loss of Bangladesh will be $3.02 billion, the prime minister expressed fears that under the current situation, the extent of loss is likely to be more than that.

At the same time, she also added that a budget deficit was likely to soar at the end of the fiscal year as the amount of revenue collection will fall short in the current fiscal year against the target set up in the budget.

GDP growth to shrink

The premier said strong domestic demand and conducive revenue and monetary policy were the prime driving forces to achieve gross domestic product (GDP) growth continually at the rate of over 7% in the previous three years, and 8.15% in 2018-19 fiscal year. The GDP growth was likely to fall due to the negative impact of the collective variables.

Import expenditure and export earnings

In the current fiscal year 2019-2020, the import expenditure and the export earnings already fell by 5% from that in the same period of last fiscal year. The reduction is likely to increase at the end of this fiscal year.

The price of fuel oil has reduced by 50% owing to the lack of its demand, which is likely to create adverse impact on the earnings of expatriates.

Private investment, service sectors and the capital market

Private investment may not be achieved up to expectation due to the delay of the implementation of the ongoing mega projects, establishing economic zones, and the scheme of bank interest rate reduction.

Various service sectors, particularly hotel, restaurant, transport and aviation, will adversely be affected.

Bangladesh’s capital market, like other countries, has already been suffering due to the pandemic.

Purchasing power of low-income people

The purchasing capability of the low-income people is likely to shrink and supply chain might be affected as the production of small and medium industries are suspended along with the transport services due to the long holidays or apparent lockdown.

As of Sunday, Bangladesh has so far recorded nine deaths and 88 cases from Covid-19, a pandemic announced by the World Health Organization (WHO).

The fast spreading coronavirus, which was first reported in China’s Wuhan, has claimed 64,747 lives and infected 1,203,188 people across the world till 1pm on Sunday, according to worldometer.

As many as 246,760 people have recovered from Covid-19, a disease caused by a new strain of coronavirus, which has spread to 206 countries and territories across the planet.