Bangladesh must take preparations in advance aimed at tackling a global economic recession for overcoming looming crisis, say experts.
The ongoing global recession will deepen in the coming days, they said, adding that to deal with this recession, Bangladesh will have to take urgent steps, including coordination among various government agencies, from now.
Otherwise, they mentioned, it will be difficult for Bangladesh to deal with the existing situation.
Earlier last month, the World Bank and the International Monetary Fund (IMF) also released two separate research reports saying that the world economy is heading towards a recession by 2023.
Analysts believe that a situation has arisen in the world mainly due to the Ukraine-Russia war after two years of the Covid-19 epidemic, which central banks and governments are struggling to deal with.
Planning Minister MA Mannan said if there is an economic recession in the whole world, it will definitely put an impact on Bangladesh.
However, it will not affect our country as like as big countries across the world, he said, adding that because the economy of Bangladesh is not so directly connected with the top economies of the world.
Mannan also said, “I hope that the whole world will try to deal with it. As it has happened two or four times in the past, it will be dealt with this time as well. We are not beyond what happens to everyone.”
In response to the question about what will be the strategy to overcome this crisis, the Planning Minister said, “We need to clean our house, generally cut our spending. Besides, we should focus more on three sectors such as education, agriculture, and communication.”
AB Mirza Azizul Islam, economist and former adviser to the caretaker government, said the global recession will mainly affect two sectors of Bangladesh, including exports and remittances.
“The country’s most export earnings come from Europe and America. Due to the economic recession, their purchasing power will decrease and reduce purchase orders. As a result, the garment sector will suffer more,” he mentioned.
On the other hand, he said, most of Bangladesh's remittances come from the Middle-East countries, adding that if the recession hits the world, Middle-East countries will also suffer due to rising fuel prices.
As a result, the income of expatriate workers will also fall, he said.
“In such case, we need to reduce our dependence on foreign countries. So, we should increase domestic production and meet its demand,” Islam mentioned.
Dr Ahsan H Mansur, executive director at Policy Research Institute of Bangladesh (PRI), said the global recession will have more negative effects on Bangladesh.
“Two steps should be taken to cope with the situation, including keeping the value of the dollar in a logical place and reducing inflation below 5 percent. If we fail to do these things, it will further worsen the macroeconomic situation,” he added.
However, beset with Sri Lanka’s economic crisis, Pakistan’s catastrophic floods, a global slowdown, and impacts of the war in Ukraine, South Asia faces an unprecedented combination of shocks on top of the lingering scars of the Covid-19 pandemic.
Growth in the region is dampening, said the World Bank in its twice-a-year update, stressing the need for the countries to build resilience.
