Bangladesh economy recovering from pandemic effects: ADB

The economic outlook for South Asia is dampened by new waves of COVID-19, but the Bangladesh economy is recovering, the Asian Development Bank has said.

The country’s exports in the first 11 months of FY21 grew by 13.6 percent year on year and remittances by 39.5 percent, the ADB noted in a supplement of its Asian Development Outlook report published last Tuesday.  

Collections by the National Board of Revenue also grew by 12.9 percent in the first 10 months year on year.

However, restrictions from early April to combat a second pandemic wave have since disrupted business, the report said.

The adverse economic impact of these new waves on the South Asian economy is “expected to be limited”, with businesses and consumers better able to adapt to the pandemic and containment measures now than they were a year ago.

The GDP growth forecast for the subregion in 2021 is downgraded from 9.5 percent in ADO 2021 to 8.9 percent, but upgraded for 2022 from 6.6 percent to 7 percent.

The inflation forecast for South Asia in 2021 is raised from 5.5 percent to 5.8 percent, mainly reflecting a higher forecast for India, but unchanged at 5.1 percent in 2022.

Inflation in Bangladesh averaged 5.6 percent in the first 11 months of FY21 as lacklustre domestic demand slowed nonfood inflation early on, the result slightly lower than 5.8 percent forecast in ADO 2021 for the whole year.

Overall, recovery continues to gain momentum in developing Asia, but recent outbreaks of COVID-19, driven in part by new variants, drag on growth in several economies.

The latest waves affected many economies in South and Southeast Asia, extending even to Papua New Guinea and Fiji in the Pacific. East Asia, by contrast, has the virus largely under control.

Vaccine rollouts are progressing in many economies, but developing Asia is still far from achieving herd immunity. As of the end of June, the region had administered 41.6 doses per 100 people, slightly above the global average of 39.2 but well below 97.6 in the United States and 81.8 in the European Union.

Vaccination progress varies widely across the region. China and several small economies have managed to administer 50 or more doses per 100 people, but almost half of the region’s economies have administered fewer than 15.