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The indicators of the country's economy show a picture of hope
At a time when the global economy is in crisis due to the coronavirus epidemic, the macroeconomic indicators in Bangladesh are showing a different picture.
Remittances sent by expatriates are setting record after record during this epidemic. On the way to the ফল 40 billion milestone of foreign exchange reserves. The prolonged recession has begun to bring life back to the capital market.
Although the income of the people has decreased, the sale of savings certificates is increasing by leaps and bounds. Export income is increasing. Bangladesh has a large surplus in the current account balance of payments. The flow of credit to the private sector is also increasing.
Though Finance Minister AHM Mustafa Kamal thinks that Bangladesh is coming out of the effects of the epidemic, experts have advised to deal with the situation with caution without suffering complacency.
The coronavirus has hit the world's largest economies as well as the economies of countries like India. The neighboring country has lost about one-fourth of its gross domestic product (GDP).
The International Monetary Fund (IMF) has predicted that the financial damage caused by the Kovid-19 epidemic will reach ট্র 12 trillion (one trillion = one trillion). They gave this forecast for the growth of 2020 last June.
Earlier in April, the agency said the world economy would shrink by 3 percent by 2020. Now they are correcting it, saying that this number will increase to 4.9 percent in the epidemic.
The IMF says it will take another two years for the world economy to return to its 2019 state.
No major economy in the world is immune to the epidemic. The United States, the world's largest economy, is expected to shrink by 6 percent this year. In addition, countries that use only the euro will shrink by more than 10 percent. The UK economy will shrink by 10.2 percent. Japan's production will be 5.6 percent less. China's economy could see 1 percent growth.
The IMF says global growth could be 5.4 percent next year (2021), up from 5.6 percent in April.
However, the Asian Development Bank (ADB) has said that Bangladesh's economic activities have started to turn around after the coronavirus epidemic hit. Due to this, the gross domestic product (GDP) of Bangladesh may increase by 7.8 percent in the current financial year.
The government has projected GDP growth of more than 6 percent in the current budget; Despite criticism that it is ambitious, Finance Minister AHM Mustafa Kamal is still optimistic.
He said, “Bangladesh's economy is booming. All indicators are good now.
According to him, this time our growth will be 7.1 to 7.2 percent. And if that doesn't happen, it's still not a bad thing at all.
The first quarter (July-September) of the current financial year has come to an end. Analyzing the dynamics of the economy in these three months, it can be seen that in the last quarter of the last fiscal year 2019-20 (April-June), the economy of Bangladesh was badly affected by the epidemic. In some cases, wonderful things have happened.
Apart from imports, the epidemic in the economy of Bangladesh is not very visible now.
These expatriate workers trapped in the epidemic are returning to Saudi Arabia, their remittances keep the economy afloat.
These expatriate workers trapped in the epidemic are returning to Saudi Arabia, their remittances keep the economy afloat.
# Remittance
Although remittances are expected to decline in the wake of the coronavirus epidemic, it is on the rise.
In the first quarter of the current fiscal year 2020-21, the expatriates sent ৬৭ 61.31 crore to the country, which is 46.56 percent more than the same period of the last fiscal year.
According to the central bank, remittances to the country during July-September of this fiscal year are more than one-third of the total remittances of the last fiscal year 2019-20.
Expressing satisfaction over this trend of remittances during the difficult times of the epidemic, the Finance Minister expressed his gratitude to the expatriates. He said the contribution of expatriates was giving them "courage" to face the crisis.
According to Bangladesh Bank, expatriates sent ২১ 215.10 million to the country in September, which is the second highest remittance in the history of Bangladesh. And for the second time in a month, Bangladesh received more than 2 billion dollars in remittances.
Earlier in July, remittances to the country reached দেশে 2.6 billion, the highest ever.
Mustafa Kamal said, millions of families are running in this remittance in the country, small business is being done. Remittances also contribute to the stock market's turnaround.
“I believe this positive trend of remittance growth will continue. Because, we are giving incentive at the rate of 2 percent from the last financial year to bring remittances in a legal way. Besides, the form to be filled for sending remittances has been made easier. ”
This is the first time that Bangladesh Bank's reserves have exceeded ৩ 39 billion through remittances.
On Thursday, the reserves were দশ 39.4 billion. Central bank officials expect reserves to reach বিল 40 billion by mid-October.
By international standards, a country must have at least three months' worth of foreign exchange reserves to cover import costs.
The government sees this reserve as an expression of the country's economic potential to the outside world. They say it will also give foreign investors confidence.
# Capital market
After a long time, the capital market of Bangladesh is in a good mood. Along with the price index, there is also a recovery in transactions.
After the collapse of 2010, even after taking various initiatives, the capital market of Bangladesh did not turn around. Occasionally there was a positive trend in the market for a month or two, but it did not last long. In January 2020, the capital market suffered another major collapse. Most of the shares fell to the bottom.
If the coronavirus outbreak occurs in the country in March, transactions will be closed for more than two months during the lockdown. Trading in the country's capital market resumed on May 31.
The DSE's main index, the DSEX, fell below 4,000 points in June after the onset of the epidemic. The transaction has been around 900 crore rupees.
In mid-September, the DSEX surpassed 5,100 points. The transaction was about one and a half thousand crore rupees.
Shakil Rizvi, director of the Dhaka Stock Exchange (DSE), told bdnews24.com: "We are also surprised. In the midst of this epidemic, a return to the positive trend of the capital market was not very much expected.
“I think two things worked here. First; The share price also fell a lot as the market fell a lot. It was a good time to come to market. Investors have taken that opportunity. Second, the lack of coordination has been reduced as regulators have become more active, with the market reaping the benefits. The capital market is getting new investment as interest rates in banks have come down. ”
Finance Minister Mustafa Kamal has added another factor to make the market better.
"A portion of the remittances that expatriates are now sending to the country are going to the capital market," he said.
# Balance_of_payment
Despite the epidemic, one of the main indicators of the economy, Bangladesh has a large surplus in the current account balance of payments.
In the first two months of the current fiscal year 2020-21 (July-August), the surplus stood at ৩ 3.3 billion.
At the same time last year, the surplus was only ২০ 204 million. The 2019-20 fiscal year ended with a huge deficit of ৮ 474.90 million (about বিল 5 billion).
Prior to that, the deficit was even higher in the 2018-19 fiscal year, at ১ 5.10 billion. In the 2016-17 fiscal year, the deficit was ৬ 958.70 billion.
Work is in full swing in the readymade garment industry.
Work is in full swing in the readymade garment industry.
# Export
Export earnings have plummeted to the bottom due to the epidemic.
According to the Export Promotion Bureau (EPB) 4/10/2020 Export Revenue Update, Bangladesh earned ৮ 979.64 billion in the first quarter of the current fiscal year 2020-21 (July-September) by exporting various products.
The target for these three months was ৬৬ 970 million.
During the same period of the last fiscal year 2019-20, the amount of this income was 984 crore 79 lakh 90 thousand (9.74 billion) dollars.
As a result, during July-August, the export income increased by 2.56 percent over the same period last year. Income has increased by 2.45 percent more than the target.
Bangladesh's export earnings plummeted in April as the coronavirus epidemic paralyzed the world economy.
Export earnings rose slightly in May after the factory was reopened, and much higher in June.
# Savings Certificates
In the first two months (July-August) of the current fiscal year 2020-21, net savings certificates worth Tk 6,455.05 crore have been sold. This figure is more than double the same period of the last 2019-20 fiscal year.
During July-August of the last financial year, net savings certificates worth Tk 3,612.36 crore were sold.
In the first month of the financial year, net savings certificates worth Tk 3,544.6 crore were sold in July. And the net sales in August was 3,848.61 crore, which is the highest in a month and a half.
Earlier, in March 2019, net savings certificates worth Tk 4,130.61 crore were sold. And in August last year, the sales amount was 1 thousand 499 crore 69 lakh.
As it is seen, the net savings certificate sales in August have increased by 150 percent as compared to August last year.
#Private_sect_debt flow
After coming down to the bottom, the growth of credit flow in the private sector, one of the main regulators of the country's investment growth, has started to turn around.
At the end of August, the total loans disbursed by the banks to the private sector stood at Tk 11,165.60 crore, which is 9.37 per cent more than in August last year.
In the first month of the financial year, the growth of credit flow to the private sector was 9.20 percent.
In June, the last month of the last fiscal year 2019-20, the growth of credit flow in the private sector came down to 7.61 percent.
In the 2016-17 financial year, the credit flow to the private sector increased by 16.94 percent. In the 2018-19 financial year, the growth was 11.32 percent.
In the current fiscal year 2020-21, the monetary policy has set a target of 14.6 percent growth in private sector debt. The monetary policy of the last financial year also had the same target, in contrast, the debt increased by 7.61 percent.
Economists and bankers believe that the flow of credit to the private sector is increasing as the government has accelerated the implementation of the stimulus package announced to the tune of Rs.
# Import
Imports did not pick up speed like in all other fields. During July-August of the current financial year, Bangladesh imported various types of goods worth ৩ 643.20 billion. This is about 14 percent less than the same period last year.
In these two months of last year, Bangladesh imported goods worth কোটি 628 million.
However, the finance minister said that due to lower prices of fuel oil in the world market, the import sector is spending less. This is a matter of 'relief' for the economy of Bangladesh.
Hopefully, with caution
Showing the indicators of the economy, Finance Minister Mustafa Kamal says, Bangladesh has turned around.
"The government is on the right track," he said. In order to cope with the damage of the epidemic, we announced an incentive package of Rs. We are getting its benefits now.
"We are tackling the epidemic with the strength of the people of Bangladesh and the visionary leadership of Prime Minister Sheikh Hasina. We are showing the world that the people of Bangladesh can turn around quickly, ignoring any obstacles. ”
Sheikh Fazle Fahim, president of FBCCI, the apex body of business industrialists, also said, “We were not affected as much as we were afraid. Looks like we're turning around fast. "
In this case, the big businessmen get the benefit of the government's incentive package, but the small businessmen are not getting it, he said.
"Despite repeated requests from the government or the central bank, the interest of the banks has not increased much. Meanwhile, we have to pay attention. ”
At the same time, the government needs to come up with far-reaching plans to deal with the long-term effects of the epidemic, said Sheikh Fahim.
Zayed Bakht, a researcher at the Bangladesh Institute of Development Studies (BIDS), said, “The incentive package announced by the government to combat COVID-19 has yielded good results.
"I think at the right time, the government made the right decision. Now these packages have to be implemented with transparency and accountability. ”
Ahsan H. Mansoor, executive director of the Policy Research Institute (PRI), is optimistic about the overall situation.
But at the same time, he warned, "There is no reason to be complacent. Kovid-19 but did not leave. When will it go, whether it will be new, how long will the vaccine actually come, whether everyone will get it, what will be the result- no one can say anything. So we have to have a long-term plan to deal with the coronavirus. ”
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