Covid-19: A visual guide to economic impacts

Bangladesh began 2020 targeting to achieve 8.2 percent economic growth and that was quite possible considering the country’s growth trajectory over the past decade.

But the outbreak of the Covid-19 has changed everything. The last quarter – April-June – of the fiscal year 2019-20 went through the pandemic, prompting the government to declare 66 days of lockdown to curb the spread of the virus.

The coronavirus lockdown brought the country to a standstill, resulting in sharp falls in revenue earnings, exports, imports, and all other economic activities. The major indicators had a chilling effect on Bangladesh’s GDP growth, which was lowered to 5.2 percent from the originally projected 8.2 percent.

The export growth decreased by 7.59 percent in the first five months to November of the current fiscal year compared to the same period a year earlier. The import growth fell by 5.54 percent during the period.

The revenue collection, an important tool of the government's fiscal policy, grew slightly positive at 3.19 percent, but missed the revenue target by a whopping more than 73 percent during the period, according to the National Board of Revenue.

A significant decline in revenue target led the government to borrow from the savings certificates and banks to meet the fiscal expenses.

In a bid to revive the economic activity, the government announced Tk 5,000 crore stimulus packages for the apparel industry that accounts for 84% of the country's foreign exchange earnings. The stimulus was meant for paying the workers’ salaries for March and April.

AB Miraz Azizul Islam, the former finance adviser to the caretaker government, told Business Insider Bangladesh that the coronavirus harmed the economy this year. “The government stimulus rollout helped the industry deal with the situation well,” he said.

Amid the economic shockwave worldwide triggered by the pandemic, Bangladesh’s GDP growth rate was doing better, he added.

“But the poverty rate has been increasing, which is worrisome. The government should attach much importance to it,” said the economist.

The government allocated an additional Tk 121,000 crore stimulus package for the small industries hit hardest by the pandemic. Until October, some Tk 54,000 crore has already been distributed among the affected businesses. It is also planning to announce more incentives for them.

BGMEA President Rubana Haque said, “We’re very worried about the new vibrant coronavirus.”

Exports to the US, Germany, Japan, Italy, Canada, and Spain have already declined. “This is hurting the garment industry,” said Rubana.