Bangladesh bids farewell to 2021 on a sweet-sour note

Like any other country across the globe, Bangladesh bids farewell to 2021 with mixed feelings as an invasive pandemic upended life for a large part of time in the year while bringing the country's economic wheel to a skittering halt.

On the other hand, despite a rebound having started lately, surges in the prices of goods and services on the local market hit hard limited-income people.

That part of the outgoing calendar apart, people and policymakers gold hope for the better in the incoming year 2022, though concern persists over omicron variant of the virus which already has infected a few in Bangladesh.

While ringing out the bygone year today (Friday), many believe that the coronavirus may come to an end in the new year, leading the economy to a faster recovery while another section of people preview the opposite.

Although a broad swath of sectors, particularly hospitality and transportation, felt the heat of the pandemic during the first two quarters until June, transportation and tourism rebounded in full flush during the last quarters with sky-high fares and other associated costs.

However, in the outgoing calendar year Bangladesh's graduation from the least-developed country (LDC) status was a piece of good news to rejoice in.

On the export front, the economy also began to savour a rebound as shipments grew by over 24 per cent during July-November period.

The country's foreign-exchange reserves hit an all -time high in 2021 at approximately $46.03 billion.

Private-sector investment has increased to some extent as credits to the private sector soared to 10.11 per cent in November over its corresponding period a year before.

Import boomed during July-October period over 51 per cent mainly because of raw-material and food- item imports.

However, economists say that the country's Balance of Payment (BoP) remains challenging area as its overall balance was negative US$1.33 billion in July-October last, with import costs far outstripping export earnings. It was in positive territory at $4.14 billion in the same period a year back.

They also view price spirals of food and non-food items at the retail level are intolerable.

Dr Ahsan H. Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), feels that inflation is looming over as a big challenge.

Inflation increased to 5.98 per cent although many believe that this point-to-point inflation does not reflect the real picture of across-the-board retail price rises.

He forecasts forex market may be volatile in the new year as the dollar inflow may be slim due to poor remittance growth.

Dr Zaid Bakht, former head of research at the Bangladesh Institute of Development Studies (BIDS), on a high note of optimism, says the private-sector credit flow was on the up and "we expect a strong rebound of the economy in 2022".

Dr Bakht, also chairman of the state-owned Agrani Bank, said that if the economy bounces back, then the financial sector, especially banking, will be vibrant in 2022.

Dr Monjur Hossain, director (research) at the BIDS, said that investment is increasing as the credit flow to the private sector was an upturn.

He says banking sector may face problem once the clients who took loans under stimulus package may fail to repay.

There is a risk as the omicron infection is found in the country, he says, adding: "We saw in the last year during March-April infection surges."

"We've been in a good position over past six months-if this trend continues, Bangladesh will have a speediest rebound."

There were more pieces of good news: all required spans of the Padma bridge were installed in the year and the bridge may be opened this year, which may bring some sort of food fortune of the economy. The country's first-ever tunnel may be in place in 2022.