'Bangladesh battling against Covid-19, its economic fallout'

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Many SMEs have already been suffering huge setbacks when it comes to production, marketing and sales

Bangladesh was engaged in fighting several battles concurrently, a single against the Covid-19 pandemic, and the different against its monetary fallout, said Mahbubur Rahman, president of International Chamber of Commerce Bangladesh (ICCB) on Monday.

Speaking at the 25th total annual council of the chamber, he explained that the monetary crisis is likely to trigger a series of corporate and household debt defaults turning into a financial meltdown as well.

The observation was also featured within an ICCB executive board report unveiled at the virtual council, which also said that in that situation economic risks aren't only limited to short-term, but also extends to important future productivity losses both through labour and capital.

Like most other emerging economies, Bangladesh must tackle numerous key issues so that you can achieve the desired GDP growth - which include healthcare, sustainable export, FDI and remittance flow, Rahman said.

In Bangladesh, there are around 7.8 million enterprises and 90 % of these are micro (including cottage) enterprises. This sector contributes around 25 per cent to the GDP, amounting to around $79 billion.

Besides, many SMEs have already been suffering tremendous setbacks in conditions of production, marketing and revenue, he also said.

Bangladesh's graduation from the LDC status by 2024 will cause the increased loss of trade preference in key export destinations and lack of other preferences. As a result, Bangladesh must give attention to FTAs with important trading countries, the ICCB president stated.

The executive board report also said the next wave of Covid-19 has recently were only available in Europe and US, that will further prolong the financial downturn.

Like the majority of other emerging economies, Bangladesh may also be affected and will need to tackle numerous key issues so that you can achieve the desired GDP growth, such as health care, sustainable export, saving MSMEs, mailing back stranded expatriate staff  to their place of work to maintain the remittance inflow and attracting more FDIs, the report also said.

Besides, as a way to maintain sustainable growth and to keep carefully the source chains functional and cost effective, it is very important to save micro, small and medium enterprises (MSMEs), it said.

The pandemic has created a massive economic contraction which will be followed by a financial meltdown in many elements of the world, as nonperforming corporate loans accumulate alongside bankruptcies. Sovereign defaults in the developing world are as well poised to spike. This crisis will observe a path like the last crisis and the crisis will strike lower-profit households and countries harder than their wealthier counterparts, the report observed.

Sovereign defaults in the developing world are also poised to spike. This crisis will observe a path like the pandemic, that may hit lower-profit households and countries harder than their wealthier counterparts, in addition, it said.

To prevent the monetary crisis from spiralling enjoy it did through the pandemic, the ICC released a call to action encouraging governments to make sure that stimulus efforts flow rapidly in to the real economy and offer direct and immediate support to MSMEs and their staff to make sure their continued operation.

Source: https://www.dhakatribune.com

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