There is no doubt that the coronavirus pandemic will adversely affect all economic indicators for Bangladesh.
That the Asian Development Bank recently forecast a 7.8 percent growth in the country's economy in the ongoing fiscal year did in no way look pragmatic.
And now, the World Bank (WB) has made a prediction that Bangladesh's GDP (gross domestic product) growth will come down to 2-3 percent in FY2020, a steep drop from the high-flying 8.2 percent in the last fiscal year.
According to the WB estimation, the Bangladeshi economy will grow at 1.2-2.9 percent in FY2021, while in the following fiscal year, the growth rate will be between 2.8 and 3.9 percent.
The WB must have come up with the forecast on the basis of some analysis. Still, the prophecies regarding the likely drop in economic growth do not look convincing. This is because there are questions with regard to the bases of predictions made by the development partners halfway in the crisis.
Nonetheless, it is obvious that the coronavirus crisis will result in a massive shock in our economy, severely affecting the export sector, remittance inflow and the industrial sector. The agriculture sector is likely to be least affected by the crisis, though. As a result, the economic growth will drop significantly.
The government has extended the nationwide shutdown till April 25, and it cannot be ascertained for how long the shutdown will actually be in force. Therefore, the economic forecasts made by the development partners appear to be a bit too early.
To what extent the growth rate will fall if the shutdown period is one month, or how much will be the effect if the period is extended to four months, is being estimated by guessing. It is hard to predict at this moment what the actual rate of shrinking is going to be.
Dealing with the aftermath of the coronavirus crisis will be immensely challenging for us. Besides, it is a global problem. Keeping people alive by providing them with food support should be given top priority at this moment. Time has not come yet to debate about what the future growth rate will be.
Bangladeshi expatriates in different countries will become unemployed. Several lakhs of migrant workers will return home. Major problems like this are looming over Bangladesh. Strategies regarding how we will face those challenges are not in our current priority list because those problems have not become visible yet. Those will become evident once the shutdown is over.
There will be massive change in our previous planning regarding the national budget for the next fiscal year. We will have some scope to think about those once we get rid of the shutdown. There is no reason to think about the budget at this moment. Now, our thinking should revolve around protecting people from the coronavirus, hunger, and scarcity of food, and giving the affected people back their purchasing capacity.
The stimulus packages announced by the government are yet to go into operation. All of them are in written documents as of now. The operation of these schemes will start after the shutdown is over.
However, the government has made the right decision to announce the packages. The limitations of these programmes will come to sight only after implementation begins. Then we will be able to predict how successful they will be.
Dr Moinul Islam is a former president of Bangladesh Economic Association