As per the UN Data of June 2020, Bangladesh had a GDP of US $ 269 Billion with a per capita GDP of $ 1670 [$690.3 billion (2017 est.) GDP per capita (Purchasing Power Parity) $4,200 (2017 est.). CIA Fact Book]
The World Bank April Update on Bangladesh of April 2021 however highlights impact of COVID 19 pandemic on the economy. GDP growth is down to an estimated 2.4 percent in FY20. Industrial growth has slowed, with a sharp decline in readymade garment (RMG) manufacturing output. Service sector growth also decelerated due to disruptions in transport, retail, hotels, and restaurants.
As per the World Bank early signs of recovery emerged in the first half of FY21, after movement restrictions were progressively lifted. Inflation remained moderate in FY20, but food price rose due to supply chain disruptions and surge in consumer demand.
Current account surplus arose as imports fell and official remittance inflows surged. Fiscal deficit has widened to an estimated 6.0 percent of GDP in FY20. Another outbreak with a surge in cases from June to August 21 has further dampened prospects of breaching COVID 19 barriers to economic growth.
Risks entail as per World Bank April Update accelerated COVID 19 infections which have already occurred, “shortfall in international support for COVID-19 vaccination programs, cost overruns on major infrastructure projects, and delays in tax reforms --- [reduction] in external financing for the Rohingya response declines, additional public expenditure may be required. In turn, higher borrowing from domestic banks could constrain the availability of credit to the private sector. Challenges in the implementation of credit and social protection programs, under the government’s economic stimulus program, could also undermine the recovery”. External risks including a weak demand for, “RMG products and reduced employment of Bangladesh’s overseas workforce”.
Importantly pandemic has reversed the country’s steady trend of poverty reduction over the past two decades due to widespread losses in employment and labor earnings is causing a significant increase in poverty and food insecurity.
Climate Change
The United Nations has recorded Bangladesh as one of the most vulnerable countries to the impacts of global warming and climate change due to its unique geographic location, dominance of floodplains, low elevation from the sea, high population density, high levels of poverty, and overwhelming dependence on nature, its resources and services. There is also a history of extreme climatic events claiming millions of lives and destroying past development gains. Variability in rainfall pattern, combined with increased snow melt from the Himalayas, and temperature extremes are resulting in crop damage and failure, preventing farmers and those dependent from meaningful earning opportunities says the UN.
The UN highlights that climate change in Bangladesh creates insecurities for food, water, life, property, settlement, livelihood assets, livelihoods and others. Climatic impacts also reduce securities directly and indirectly. Environmental degradation, degradation of land resources ultimately reduces food securities, health securities etc and at the same time increases conflicts over resources and livelihood persuasions says the UN.