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BSS-30
Bangladesh-IMF-COVID-19
IMF foresees robust growth to follow COVID-19 setback in Bangladesh
DHAKA, April 15, 2020 – International Monetary Fund (IMF) today forecasted a robust economic growth to follow a massive COVID-19 onslaught on Bangladesh’s GDP in the current year reducing it to 2 percent but expected the figure to be record 9.5 percent in 2021 calendar year.
In a latest report issued overnight, IMF revised its October 2019 prediction of 7.4 percent growth rate in the current 2020 saying the global pandemic was likely to bring down the figure to 2 percent.
The World Bank’s main lending arm, however, foresees Bangladesh’s economy to witness a big rise in 2021 with a record growth of 9.5 percent if the novel coronavirus shock was faded out in the second half of this year and economic activities return to a normalcy.
“(But) At this point, there is great uncertainty about its severity and length (of the crisis),” said the IMF’s The World Economic Outlook April 2020 report adding that the world’s financial system by now felt a dramatic impact.
It added: “A further intensification of the crisis could affect global financial stability”.
The World Bank in a report earlier this week, projected Bangladesh’s growth rate to range between 2 and 3 percent, which finance minister AHM Mustafa Kamal differed saying whatever the situation the growth rate in the outgoing fiscal to remain above 6 percent.
Asian Development Bank (ADB), however, in a report earlier this month expected the COVID-19 to cause lesser impact on the growth of the ongoing 2019-2020 as the COVID-19 onslaughts could not impact much the growth rate as the fiscal is set to end in June this year.
ADB predicted the figure to be 7.8 percent compared Bangladesh’s own projection of 8.2, a figure laid out in the budget in June last year.
The World Bank and the IMF also differed in their projection of the crisis duration with Bretton Woods Institute foresaw a longer time recession while its lending arm predicting an earlier recovery.
The latest IMF report said as the COVID-19 pandemic was inflicting high and rising human costs worldwide, “the necessary protection measures are severely impacting economic activity”.
It projected the pandemic to reduce the global economic growth to “–3 percent” in 2020, a situation which would be much worse than that of the 2008–09 financial crisis.
The IMF, however, expected the global economy to grow by 5.8 percent in 2021 with normalization of economic activities backed by policy supports but simultaneously warned that “risks for even more severe outcomes, however, are substantial”.
The organization said effective policies were essential to forestall the possibility of worse outcomes, while necessary measures to “reduce contagion and protect lives are an important investment in long-term human and economic health”.
Their report said policymakers in respective countries would need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically since “economic fallout is acute in specific sectors”.
“And internationally, strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems.“ it added.
BSS/PR/GM/KUC/TAN/AR/2017 hrs