Sunday, 5 December, 2021

Service sector’s revival depends on mass vaccination

The service sector’s economic revival nowmostly depends on the pace of mass vaccination, said experts.

They said the vaccination would raise confidence of the people in coming out of home for normal daily activities.

Talking to the Daily Sun, the country’s leading economists also emphasized the need of policy supports to revive the service sector severely hit by the coronavirus pandemic.

Service sector includes retail, banks, hotels, real estate, education, health, social work, computer services, recreation, media, communications, electricity, gas and water supply.

There is no updated data on service sector in second quarter of the fiscal year on the government’s site as the Export Promotion Bureau (EPB) released its last report in June this year.

Former Bangladesh Bank governor Prof Salehuddin Ahmed thinks the post-pandemic revival of the service sector will take time as the people’s confidence on outdoor activities is yet to increase.

“Service sector depends on activities of big industries. When the formal manufacturing industries will come to normal activity, the service sector also starts to revive. It can happen from this December or January,” Prof Salehuddin told the Daily Sun.

He said the providing of digital services should continue for the sector’s sustainabilityas the coronavirus will not disappear from the world so soon.

“We can talk about online service as a form of retail service. However, it should not be like fraudulent ecommerce sites which abused the system,” former central bank governor said.

“If we can establish connectionbetween the manufacturers and sellers in a transparent way, it will bring fruits for the sector,” he added.

In its latest economic review, Metropolitan Chamber of Commerce and Industry (MCCI) appreciated the local businesses in service sector which recorded a higher growth of 5.61 percent in FY2020-21, compared to 4.16 percent a year ago.

The share of the services sector in GDP increased to 51.53 percent in FY2020-21 from 51.48 percent in FY2019-20, according to the MCCI review.

Regarding the service sector, Centre for Policy Dialogue (CPD) distinguished fellow Prof Mustafizur Rahman said that the most parts of service sector are informal, which is yet to tapped by the government.

“There are three major actors in the country’s service sector. They are – retail, travel and tourism,” he said.

“The confidence of people is important for flourishing the travel and tourism,”Prof Rahman said.

He also emphasised the need for mass vaccination to see a revivalof the service sector.

The country’s economists further said the authorities should focus on “contain and control” of the virus infection to recover the growth in the sector.

Bangladesh exported services worth of $6.6 billion in FY2020-21 with a moderate growth of 8.67 percent year-on-year, according to the EPB data.