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Bangladesh is well placed to ride out the global recession, which is looming large on the horizon, as the country has already tightened import payment amid good food production, economists have said, suggesting promotion of demographic dividend in workforce to avoid the economic slowdown.
“The recession may affect the countries in Africa or Europe amid the war. We expect a good Aman yield this year. If the government supports production of Boro in the peak season, there’ll be no worry about the food security as well as the recession,” Ahsan H Mansur, executive director at Policy Research Institute (PRI), told the Daily Sun.
Repeated economic shocks due to the coronavirus pandemic, Russia-Ukraine war and sanctions imposed on Russia by the West pose risks of a worldwide recession in 2023, according to studies of a number of organisations, including World Bank and Ned Davis Research.
Aman paddy has been cultivated on 5,905,000 hectares of land across the country this season, according to the Department of Agricultural Extension.
Dr Mansur also mentioned that the Ministry of Finance has formulated strategies to tackle the upcoming economic challenges like other developing nations.
Chairman of Research and Policy Integration for Development (RAPID) Dr MA Razzaque said the World Trade Organization (WTO) predicts very small growth in trade for this year and the next one.
“We’ve seen our September exports registering a fall. The remittance inflow has also slowed down. However, we’ll expect prices of commodities and fuel to fall under the recessionary pressure. This will ease the domestic inflation,” he told the Daily Sun.
The economist thinks import restrictions imposed earlier by the Bangladesh Bank are likely to have an adverse impact on domestic production. “Along with the slowdown in exports and remittances, the overall growth in the domestic economy could significantly be lower than anticipated in the budget speech,” he said.
For Bangladesh, maintaining macroeconomic stability and sustainable external balance will remain as a significant challenge, according to Razzaque, also a director at PRI.
“If the demand for foreign exchange in the informal channel is strong, maintaining stability in the exchange rate might be proved to be a difficult option. Therefore, tackling inflation in the face of growth slowdown and maintaining sustainable external balance should be the priority objectives in the coming months,” said the economic researcher.
Policy Exchange Chairman Dr Masrur Reaz also echoed Dr Mansur, saying the economic recession will hardly affect Bangladesh. “Rather, it may take a toll on the backward economies in Europe and North American territories.”
“To mitigate any challenges in economy, Bangladesh should cap the money circulation at the market to control liquidity for taming inflation. The present trend of inflation (over 9 percent) will not ease soon,” Dr Masrur told the Daily Sun.
The economist mentioned that Bangladesh is not yet in such a position to adopt quantitative tightening to keep the reserve system’s balance sheet stable.
“We’re yet to take quantitative tightening. The bank interest rate might be increased for tackling inflation. The macroeconomic indicators may be affected for decline in exports as consumption in the first world has declined significantly,” he said.
International Monetary Fund (IMF) has recently lowered the projection for Bangladesh, estimating a 6 percent GDP growth in 2022-23 fiscal year when the inflation will be 9.1 percent.
(DS)
