Bangladesh economy may reach the annual growth target of 7.40 per cent in the current fiscal year (FY21) as long as the second wave of Covid-19 does not restrain the economic activities and the development of vaccines casts a positive impact.
The latest monetary policy review of Bangladesh Bank made the observation.
“The economy is likely to maintain the targeted growth path with an expectation that a second wave of the pandemic would not harm the economy seriously,” said the annual monetary policy review of the central bank.
“Besides, an advanced stage of vaccine development would have a positive impact on the global as well as domestic economy,” it added.
The central bank has released the monetary policy review after six years and posted it on its website on Wednesday afternoon.
“The government has set a 7.4 per cent real Gross Domestic Product (GDP) growth target for FY21 weighing on the rebound in the economic situation aided by continued policy initiatives such as stimulus packages, low cost refinance schemes, and policy relaxations, among others,” it mentioned.
The flagship publication of the central bank also pointed out that the country’s economy has recovered faster from the pandemic-driven slowdown, and it was reflected in the sector-wise performance for the first quarter of the current fiscal year ‘amid a dreadful situation as the pandemic continues.’
“The growth targets indicate that growth will recover at a faster pace in FY21 and will increase gradually,” it added.
The review noted that Bangladesh economy faced Covid-19 pandemic-induced challenges in every economic sector, but managed a 5.24 per cent real GDP growth in FY20 which was significantly lower than a record high of 8.15 per cent growth in FY19.
“The contraction in GDP for FY20 stemmed mostly from the supply-side shocks, suffered mainly by pandemic-induced disturbances in the industry sector, particularly by substantial production loss in large and medium scale manufacturing output,” it explained.
The review report also pointed out that to support the economy during the pandemic, the government and the central bank initiated stimulus packages of more than TK 1.21 trillion and also relaxed policy and provided low cost refinance schemes.
“Aided by those prompt policy initiatives, the economic recovery of Bangladesh remained at the forefront among the neighbouring South Asian economies and attained a 5.2 per cent growth rate in FY20 while growth rates of India, Pakistan, and Sri-Lanka are expected to be negative in 2020,” it added.