64% of the companies reported a weak economic recovery
In nearly one year and a half since the beginning of the pandemic in Bangladesh, only 9% of the pandemic struck companies reported a strong economic recovery.
Meanwhile, 27% of the companies reported a moderate recovery and a major 64% of the companies reported a weak economic recovery.
The findings came out in a study published by the South Asian Network on Economic Modeling (Sanem) on Saturday.
The survey that led to the study was conducted nationwide among 501 firms during the month of July. 255 of the firms fell under the manufacturing category while 246 were services with 40% of them being based in Dhaka.
As of July 2021, micro and small industries seemed to have the hardest time recovering, with more than 73% of them recording a weak recovery, according to the study.
Medium and large firms in the meantime reported a weak recovery of 62% and 45% respectively.
The study further mentioned the factors strongly contributing to the economic recovery are — foreign remittance, export of goods and services, vaccination programme, bank’s credit to the private sector, management of the second Covid wave, import of raw materials, goods and services and existing stimulus package and its disbursement.
Meanwhile, it was also observed that the economic recovery was 57% till March 2021 from March 2020, a year of the pandemic. However, as of June 2021, the recovery went back to 35% again.
As per stimulus packages, 65% of the firms said that they did not receive any stimulus. Meanwhile, 21% said that they received stimulus packages and 14% said they don’t know about any such package.
94% of the companies who did not receive stimulus earlier still remained out of the stimulus packages while only 6% of them received stimulus, according to the Sanem study.
Among the firms, the ready-made garments (RMG) stands at the top of receiving stimulus with 52% of them saying that they received stimulus. Meanwhile, textiles remained second with 36% and leather remained third with 30%.
63% of the firms who received stimulus packages also said that availing the package was problematic due to lengthy procedures. 56% said that they faced difficulty due to bank-related services while 33% said that they did not understand the procedure of application.
During April-June 2021, 65.7% of the firms remained afloat with their own savings while 28.1% had to borrow money or take a loan.
19% had to lay off their employees, 8.8% went for a salary cut and stimulus saved only 17.8% of the businesses.
Only 1% of the respondents said that they had to relocate their factories to survive the pandemic.
As per vaccination, 302 firms, which is 60% of the total respondents, said that their employees received at least one dose of the Covid-19 vaccine. The rest 40% said that their employees did not receive any sort of vaccination yet.