The outbreak of COVID-19 became a epidemic in the year 2020 the economy of Bangladesh was slowed down since public health took the lead. The years of expansion and growth were shattered by a period in the recession and the trade-off between life and livelihoods creating huge challenges that the state.
One year later and the first signs of recovery are appearing quickly.
Job openings are plentiful as employers search for vacant positions that are long empty. Even though investments are still a bit short of what they should be business that focus on import and export are starting to pick up speed.
Entrepreneurs and economists, as a result have urged the government to take the appropriate measures to minimize the risks of commerce and trade to create long-term growth.
Fitch Ratings, a leading global credit agency, is forecasting 7 percent growth in the economy for Bangladesh for FY22. Its outlook for the year ahead is also positive with Fitch expecting growth to grow to 7.2 percent.
In a report that was released on November 8, Fitch assigned a ‘BB”-” bond credit rating for Bangladesh with an outlook of stable.
According to the latest data released in the latest data released by Bangladesh Bank, import expenditures have risen 47.56 percent during the beginning trimester (July-September) during the fiscal year currently in effect compared to the same period in the previous year. The current figure is $18.73 billion.
Export earnings have experienced growth of 22.62 percent growth year-on-year in the words of the Export Promotion Bureau.
Bangladesh exports goods in the amount of $15.74 billion in FY22. This is 13.33 percent more than the goal.
It is clear from the export growth as well as other indicators that the nation’s economy is gaining momentum from the pandemic-induced stagnation, according to economic expert Ahsan H Mansur, executive director of the Policy Research Institute.
“We’re currently in the post-recovery period. Production is almost at the levels prior to the pandemic. This is very encouraging and, hopefully, we will overcome the negative effects of the COVID-19 virus in the initial one or two months the coming calendar year.” the doctor said.
The national deficit for trade was $6.5 billion for the first period of the fiscal year 2021-22 which is three times more than the same time last year.
But, Ahsan played down concerns regarding the trade deficit as the economy gaining momentum.
“Import growth is putting pressure over the balance of payments. The increase in imports and the drop in remittances have been major blows on the balance of payment. The migrant worker couldn’t travel overseas. However, they’re returning to their home countries. The government needs to focus on this. The decrease in remittances is only temporary. It will soon be back to normal.”
Remittances topped a record at $21.7 billion during 2020. Fitch blamed it on the shift towards more formal remittance channels as well as Bangladesh Bank’s 2-percent cash incentive for remittances to the inward.
The US-based agency believes that the huge increase year-on-year in 2020 is not likely to be replicated as certain factors which led to the huge jump in remittances are temporary.
According to Ahsan Mega projects like projects like Metro Rail, Dhaka-Chattogram dual gauge, Karnaphuli tunnel and Padma Bridge are also expected to be beneficial to economic growth once they are finished.
Despite all the positives, the economist noted there is a problem with foreign investments in Pakistan. is very low. In the future, it could be quite difficult to maintain the balance between the micro-economics and the large industries According to Ahsan.
He believes that it is a matter that hasn’t been given enough attention. The cost of homeownership is beyond the buying capacity of the typical homeowner and housing is not made affordable for those who earn less than the middle-income range.
“There’s no policy of the government here. The policy may have led to an enormous demand for the economy. It could have triggered an investment of 4.5 trillion. The government has to act upon this.”
The economic revival has coincided with an improvement in the coronavirus pandemic According to Sirajul Islam, executive chairman of the Bangladesh Investment Development Authority or BIDA.
However, the country hasn’t been able to draw enough investment from overseas due to the restrictions on the spread of pandemics in advanced countries particularly in Europe He said.
“But foreign firms that have invested before in Bangladesh have made additional investments when needed. The economic zones are attracting foreign investment. We urged investment via virtual conferences with Britain as well as the US as well as other countries during the epidemic.
“Many of them want to make investments in Bangladesh but the process was delayed because of restrictions on travel around the world. This is why we require more time to get rid of the negative effects of COVID-19 pandemic , in terms international investment” BIDA chairman said. BIDA chairman stated.
INCREASE RAW MATERIAL Import
First quarter in the current fiscal year saw an increase of 54.67 percent increase when it came to the purchase of raw materials used in large industries. The a total expenditure of $4.84 billion as of. The import of raw materials was up by 68 percent for the garment sector.
Additionally, the importation of capital assets also saw an increase of 40 percent. Capital assets valued at $3.69 billion came into the country during the beginning of fiscal year, in comparison to $2.63 billion the previous year.
Raw material valued at $1.1billion were specifically imported to be used in specifically for the Export Processing Zone, or EPZ and the EPZ’s figure was $694 million in the previous year.
Export-oriented companies, a different sector of the economy saw significant growth in the beginning quarters of the fiscal year. Bangladesh broke records for monthly exports between September and October, as the number of international purchases increased due to the decrease in coronavirus infections all over the world.
In a report that highlighted the “significant recovery of exports in all sectors, Fitch Ratings said garment exports grew up to $31.5 billion for FY21 after a recovery in demand in the major markets following an era of less consumption in both the EU as well as the US.
Exports of garments, which make 80 percent of total exports and around 8.5 per cent of the country’s gross domestic product, fell in FY20, to $27.9 billion.
Analysts believe that exports will continue to grow from increasing to increase.
Bangladesh delivered goods that were worth $4.73 billion during October. This was which was a monthly record that marks an increase of 60.37 percent growth year-on year. The number is $4.16 billion during September. That was which was the previous record set in the month.
After a 11 percent year-on year decrease in July, the export earnings improved by a 14 percent jump to $3.4 billion by the end of August. However, the total profits during those first 2 months of fiscal year fell short of the goal by 7.84 percent.
More JOB POSTS
The resurgence in economic activity has a positive impact on the work market as analysts say. The schools have reopened, while the federal government begun the recruitment process after a long absence.
Because of the lockdown, many employees were laid off in the garments industry in the last one and two-and-a-half years. However, the tables have been turned , with the majority of the factories seeking to recruit new employees.
The garment factories are receiving new work requests They are looking for skilled workers, according to Syed Nazrul Islam, senior vice-president of Bangladesh Garment Manufacturers and Exporters Association.
Many of the major factories require between 10 and 15 percent more workers, he added. “It’s thought that the clothing factories employ about 2.5 million employees that means an additional 300,000 workers could remain employed.”
Recently, a few garment work orders were transferred into Bangladesh in the past from Myanmar, China and Vietnam. Since the offices have reopened across Europe as well as the US the need for knit or woven clothing is increasing.
Yet, Nazrul warned that job creation in the industry of apparel may result from a deficiency of basic materials.
“The products come from China. However, China has its factories open two or three days each week and this could create a shortage in supplies for weaved fabric. Future employment in this field is tied to this issue,” he said.