The Bangladesh economy is losing Tk 33 billion every day from its service and agriculture sectors during the nationwide shutdown over the coronavirus outbreak, a new study says.
Researchers from Dhaka University’s Institute of Health Economics released the finding after analysing the state of national economy from March 26 to April 25 in a study on the impact of the coronavirus on the economy.
The country incurred losses totalling an estimated Tk 1 trillion in March, lead researcher Prof Syed Abdul Hamid said on Tuesday, reports bdnews24.com.
The researchers attempted to calculate the temporary or current losses in the domestic economy based on the 2018-2019 GDP.
Bangladesh needs to focus on adopting practical initiatives under the current circumstances, he said.
“On an average, the estimated gross loss per day currently in the agriculture industry and service sector is Tk 33 billion. This amount may shoot up with the extension of the lockdown although we were unable to determine that amount,” he said.
The economic losses may exceed Tk 2 trillion, almost 9 percent of the GDP, if the country remains under lockdown until the end of May, Prof Hamid said.
Agriculture, industry and services are the three major sectors of the economy, each comprising different sub-sectors.
AGRICULTURE LOSING TK 2BN A DAY
Bangladesh’s agriculture is divided into three major sub-sectors, farming, livestock and fisheries. Although the level of production in these sectors was not hampered in the short term, prices of produce slumped as foreign economies closed down. Therefore, the sector is facing an estimated loss of Tk 2 billion a day.
The industrial sector is incurring a loss of about Tk 11.31 billion per day, especially on the production and construction front.
SERVICES SECTOR IS REELING
The economic loss is more prominent in the services sector. Most areas of this sector are under lockdown except for the trade of daily staples and emergency services. All modes of communication, including road, rail, waterways and aviation are closed.
Tourism, hospitality and the real estate industry are also reeling from the shutdown while the private health sector too has come to a standstill. The services sector is losing Tk 20 billion per day.
The government has rolled out a huge incentive package of around Tk 950 billion to mitigate the economic impact of the shutdown. However, the efficacy of the stimulus package will depend on the short, medium and long-term economic losses along with its implementation, according to Prof Hamid
The researchers also made some recommendations based on the study.
“This calculation will help decide if the government’s incentive package is enough to address the crisis. On the other hand, it will put pressure on them to properly implement the stimulus,” said Prof Hamid.