In its review of Bangladesh’s macroeconomic performance, the Centre for Policy Dialogue estimates losses incurred by four key sectors due to recent hartals and blockades to amount to Tk49,018 crore. While some of this may be recouped, if left unrecovered, the sums lost amount to 4.7% of GDP.
This analysis supports the lower range of estimates projected by the World Bank’s recent report on Global Economic Prospects, which forecasts Bangladesh’s GDP growth for the current year to be 5.7%. The IMF and Bangladesh Bank have also forecast rates in the range between 5.5% and 6%.
These figures contrast with the finance minister’s view that growth will remain above 6% this year.
We welcome the compensatory measures which the government has been supporting to help offset losses suffered by export-oriented sectors. However other large sectors, notably agriculture and small and medium businesses still need more help to get back on their feet. The government needs to take more action to help all parts of the economy to recover.
In the long run, it is the opportunity costs inflicted by the political crisis which have the most negative impact. Flows of investment and the implementation of development projects have been slowed down and businesses are deterred from creating new jobs.
The government must work urgently to resolve the political disputes which gave rise to the violence. Renewed dialogue is essential to help bring the certainty and stability which the economy needs to stimulate new investment and allow the country to live up to its potential.