The business firms, on average, have been able to recover themselves by 57 percent of their damages occurred during the pandemic, said a survey report.
However, the second wave of the virus significantly lowered the confidence of the firms with only 2 percent reporting that they would be on a strong recovery compared to 34 percent before the situation worsened.South Asian Network on Economic Modeling (SANEM), which conducted the survey jointly with Asian Foundation said the business firms still need some more time to get back to the pre-pandemic situation.
According to the survey, the financial sector has been able to recover 73 percent of their damages, followed by pharmaceuticals and chemicals, RMG and textiles amongst others.
The survey titled “Covid-19 and Business Confidence in Bangladesh” was revealed on Sunday at a virtual event.
SANEM and the Asia Foundation jointly conducted the survey on the better understanding of the pulse of the economy as well as sustainability of the recovery path as the Covid situation deteriorates.
The report said before the current upsurge of Covid-19 cases, 34 percent of the firms reported that the economy was on a strong recovery, while 14 percent thought it was on a weak recovery and 52 percent was on a moderate recovery, the survey cited in its findings.
But after the second wave of the virus hit the country, only 2 percent of the firms reported that the economy would be on a strong recovery, 68 percent thought it would be on a weak recovery and 31 percent on a moderate recovery, it said.In terms of the business recovery, the study cited that the business confidence for April-June 2021 has deteriorated over the business confidence in January-March 2021.
The deterioration is visible for all of the sub-components of business confidence index. This deterioration poses a threat to the future businesses.
According to the survey, foreign remittances, export of goods and services, bank’s credit to the private sector, and vaccination programmes amongst others are major factors that are contributing to the overall economic recovery.
Like in the earlier rounds of the survey, it found that the major areas of challenges include lack of package for the industry, lengthy procedure, difficulty in bank related services, and difficulty in information. No major improvements observed on these indicators.
It also found stimulus packages are having positive and significant association with firms’ recovery.
Effective implementation of the stimulus package is critically important, the report said. An assessment is urgently required on the stimulus package implemented so far and stimulus packages need to be redesigned and expanded amid the current wave of Covid-19, the survey suggested.