Impact of COVID-19 on Bangladesh Economy and its Future Outlook

Shaquib Quoreshi

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When the COVID-19 pandemic hit the world in the first quarter of 2020, the countries were totally unprepared in every sense. But the governments took various emergency measures in healthcare, economy, trade, employment, and social security. Such emergency measures largely proved effective in many cases, as the governments and the global economy have managed to avoid the worst case scenario during the following period of one and a half year, more or less. 

Here, we are not talking about the death tolls, but the economic loss only. If we revisit the ghastly forecasts made by the global institutions like the UNCTAD estimating about 1 trillion US dollars loss to the global economy, and the ILO predicting 25 million job losses globally, we see with some relief that the global economy has not been affected that badly during the last fifteen months or so.

Now, coming to the context of Bangladesh, we see some dents made by the COVID-19 pandemic. In the initial months, there were cancelled export orders and halted productions, but the economy picked up the pace gradually. Yes, the targeted rate of GDP growth has not been achieved, and targets of exports, revenue collection, and other parameters remained unachieved. The most serious disaster happened in the form of sudden jump in the poverty rate. According to an estimate by the General Economic Division, the country’s poverty rose to 29.5% as of June 2020, which was 20.5% in the last fiscal year (https://www.dhakatribune.com/health/coronavirus/2020/08/12/), placing a total of 49.43 million people below the poverty line. 

Rather than looking only at the official statistics on GDP, we would like to take an alternate but well-accepted approach of looking at the level of economic activities, whcihwhich is considering the actual peak supply of electricity. Data obtained from the website of Bangladesh Power Development Board, we see almost uninterrupted rise in the peak supply of electricity, which can be rationally interpreted as a sign of continued increase in economic activity, despite the onslaught of COVID-19 pandemic in case of Bangladesh. 

As of March 1 in 2020, right before the start of the pandemic, the peak day-time supply was 6,995 megawatt, and on April 15 in 2020, right in the middle of the first phase of the nationwide shutdown, the peak day-time supply was 7,422 megawatt. It should be noted here that the factories remained open at that time, despite severe criticisms by many quarters, and that specific day was a holiday, and yet the day-time peak supply and use of electricity was higher on April 15 compared to the pre-COVID daily peak about 6 weeks ago. 

The amount of day-time peak supply on June 1, 2020 was 7,591 megawatt, when the business as usual situation started to prevail after the initial days of shutdowns were over. On June 30, 2020, the day-time peak supply increased further to 8,969 megawatt, and gradually rose to 10,026 megawatt on June 1, 2021 in a span of the next one year. 

However, on June 30, 2021 when the country is again in a phase of nationwide shutdown, though with continued production at the industrial establishments and availability of at the emergency services only, the day-time peak stood at 9,751 megawatt, slightly less than that of a month ago, for understandable reasons.

Looking at the day-time peak of electricity demand during the 15 months of COVID-19 pandemic in Bangladesh, it tells us that economic activities have not been dented. Yes, there have been cases of closures and job loss, but structural readjustments and alternative livelihoods have been emerging. There are challenges in areas of equitable distribution of resources and providing economic support to the disadvantageous groups. But on the aggregate level, Bangladesh is doing quite fine.

As for the future outlook, it would not be unreasonable to say that, if there is no major economic downturn on the global economy, Bangladesh would be able to maintain, at least in the short term, its current position in the global supply chain of goods and services.

However, there are overwhelming concerns about the gravity of the healthcare situation, particularly due to the recent rapid spread of the virulent Delta Variant of the coronavirus, mismanagement in vaccine procurement, and weak financial governance in Bangladesh.

**Shaquib Quoreshi, Enterpriser, Business Intelligence Limited (www.bisntel.com)**

Disclaimer: views expressed in the content belong to the content author and not the organization

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