Bangladesh’s economy recovering: Survey

Staff Correspondent

17 February, 2021 12:00 AM printer

Bangladesh’s economy recovering: Survey

Majority of the business entities in the country think Bangladesh is on the path to economic recovery, a recent survey by the South Asian Network on Economic Modeling (SANEM) showed.

According to the findings, 71 percent of the 502 surveyed firms think that Bangladesh is on the path to economic recovery.

16 percent consider it a strong recovery, 40 percent think it as moderate recovery, while 15 percent perceive it as weak recovery.

Faster recovery is taking place in the pharmaceuticals, textile, and financial sectors, the survey found.

The report was released in a webinar on Tuesday jointly hosted by SANEM and The Asia Foundation on “COVID-19 and Business Confidence in Bangladesh: Findings From the 3rd Round of a Nationwide Firm-Level Survey.”

Professor Selim Raihan, Executive Director of the SANEM presented the report of third-round of national firm level survey.

The report mentioned that sectors are experiencing recovering at varying paces.

The business confidence for January-March 2021 showed some improvement over business confidence in October-December 2020. The improvement is visible in most of the sub-components of business confidence index (BCI).

Some of the indicators, such as profitability, employment and wage indicators have improved slightly compared to the past quarter, added the report.

The report mentioned that effective implementation of the stimulus package is critically important. An assessment is urgently required on the stimulus package implemented so far.

 “69 percent of the surveyed firms are yet to receive any stimulus package. Like in the earlier two rounds of the survey, in major areas of challenges include lack of package for the industry, lengthy procedure, difficulty in bank related services, and difficulty in information. No improvements observed on these indicators”, report showed.

Enabling Business-Environment Index (EBI) shows a positive association with firms’ present business status index (PBSI). It confirms that improved business environment helps firms perform better, even during a pandemic.

The survey also found corruption, poor trade logistics, unfavorable tax system, access to finance, and management of the COVID-19 health crisis appear to be the major challenges.

The sectors need priority attention are leather and tannery, light engineering, wholesale, transport, RMG, food processing, and real estate.

All these sectors should be given additional incentives such as lowered interest rate for a longer period, increased and eased up duty draw back facility, and increased export cash back facility, said the report.

The government must focus on improving the overall business environment to lower such implicit, indirect cost of business operation, report suggested.