The government hopes the pandemic will come under control by September 2020 and the economy will see a V-shaped recovery thereafter
The government plans on setting a target of an 8.2 percent GDP growth for the fiscal year 2020-2021 in the hope that the coronavirus situation will come under control by September this year and the economy will see a quick recovery thereafter.
Besides, the rate of inflation is likely to be set at 5.4 percent for the next fiscal, in anticipation of a normal supply of commodities and a stable market.
According to officials of the Finance Division, who are involved in preparing the national budget, the government expects the pandemic to come under control in the first quarter of the coming fiscal and the private sector that has come to a grinding halt due to the virus will then resume production at full throttle to tide over their losses.
Works on various projects taken up across the country under the annual development programme of the government are also expected to get into full gear by that time.
They point out that economic activities in various countries witness a V-shaped recovery after a pandemic or a disaster. Iraq attained an 8.5 percent growth in its GDP (gross domestic product) in the year following the Iraq War, they mention, adding that they are expecting an 8.2 percent growth in the Bangladesh economy in the next fiscal since the growth rate is going to be low in the current year.
In a V-shaped recovery, an economy suffers a sharp decline, and recovers quickly and strongly after that.
In an interview with The Business Standard in mid-April this year, Finance Minister AHM Mustafa Kamal also voiced similar expectations. He said the country's economy would regain its pre-pandemic pace within a couple of months of the coronavirus outbreak being quelled.
The general public, including businessmen in the country, had their plans of recovering from the pandemic fallout, he added.
The government in the national budget for the current fiscal has also set an 8.2 percent GDP growth target. Finance ministry officials say the economy could see higher growth than the targeted one if there were no coronavirus outbreak.
All economic activities have practically been in a standstill for the last two months of general holidays starting from the last week of March. The government, therefore, now predicts a 5.25-5.35 percent growth in the country's GDP this fiscal. The revised budget for the ongoing fiscal will include such a target.
The International Monetary Fund (IMF) also forecasts that the Bangladesh economy will take a U-turn after the coronavirus pandemic is over. According to estimates by the IMF, Bangladesh's GDP growth in FY2020 will be 2 percent – the lowest rate after 1988, while in FY2021 the growth rate will jump to 9.5 percent.
However, the World Bank has projected a 2-3 percent GDP growth for Bangladesh in the current fiscal, which it predicts will fall further to 1.2-2.9 percent in the following fiscal. The WB also predicts that although Bangladesh's economy will turn around in FY2022, the rate of GDP growth will still remain below 4 percent.
Bangladesh attained an 8.15 percent GDP growth in FY2019, which was the highest among Asian nations that year.
While commenting on their estimates about the inflation rate for the next fiscal, the finance division officials say they expect that fuel prices will remain stable in the global market next year, which will also help to keep the global commodity market stable.
Besides, the government presumes that the production and supply of agricultural and industrial goods will be normal in the domestic market.