The Financial Express

Impacts of coronavirus

Worst-ever economic depression likely

Commerce ministry fears

Rezaul Karim | Published: April 09, 2020 08:39:40 | Updated: April 09, 2020 14:19:50

Picture used for representational purpose - Collected Picture used for representational purpose - Collected

The country's economic sectors might face a worst-ever recession in the wake of the coronavirus pandemic, according to a position paper of commerce ministry.

The paper was presented at a high-level meeting held at the Prime Minister's Office (PMO) recently.

It said joint efforts by public-private, financial and non-financial initiatives might reduce possible damage to the export and import sectors.

The ministry has already taken multiple measures to combat the COVID-19 outbreak across the country.

It is also working sincerely to implement the steps. The steps include strengthening market watch to keep supplies and prices of commodities stable in the market and providing aid in import and export of goods, especially urgent medicine.

Other measures include encouraging consumers to buy a reasonable amount of commodities in cooperation with the law-enforcement agencies.

The 2008-2009 global financial crisis could not affect Bangladesh largely. In 2013, after the Rana Plaza tragedy, garment sector had face a challenge.

But the current crisis is global. On the other hand, it is all-embracing.

The world may feel a deep economic recession due to the COVID-19 outbreak that could also create troubles for the local economy.

In its paper, commerce ministry has recommended preparing small-, medium- and long-term action plans to recover from the coronavirus outbreak.

The country's export witnessed 4.8-per cent negative growth during the first eight months of this fiscal year (FY) than that of the same period last year.

The apparel export saw negative growth of 5.5 per cent during the period, reads the position paper.

Buyers have so far either cancelled or held up orders worth $3.0 billion following the outbreak of the superbug.

On the other hand, the overall import sector saw 2.2-per cent negative growth from July to January in FY '20 compared to the same period in FY '19.

Total imports fell 14 per cent in January 2020 alone.

It is apprehended in the paper that domestic demand may fall in the next three months that will affect the import sector indirectly.

Besides, the import of industrial raw materials will also decline if the export earnings fall.

"Undoubtedly, the pandemic has put the country at high health and economic risk. There has been uncertainty in import and export sectors for global supply-chain disruptions," added the paper.

When contacted, commerce secretary Dr Md Jafar Uddin said a position paper on COVID-19 was presented at a meeting held at the PMO last March.

The paper was prepared with the information of last February. The impact of the coronavirus pandemic on the country is yet to be assessed.

"We will be able to understand "how the economy hasbeen affected" by scrutinising the overall info of March last, Mr Uddin added.

The ministry is collecting opinions from different agencies and trade bodies on possible impacts of COVID-19 on economy and the course of action to fight the challenges, a source said.

The Business Promotion Council, which operates under commerce ministry, after a recent meeting with trade bodies representing the affected sectors sent a set of recommendations to the parent ministry.

It suggested providing special financial incentives to the coronavirus-affected sectors to help them offset the impacts.

On April 05, Prime Minister Sheikh Hasina announced a financial package of Tk 727.5 billion, including the previously announced Tk 50 billion, in efforts to face corona's impact on economy.


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