Md Fazlur Rahman

Exporters and local businesses have received a shot in the arm since June on the back of improved economic activity but the fragile recovery could evaporate before taking root if the country is hit with a second wave of the Covid-19.

Bangladeshis doing business internationally had witnessed their worst crisis in recent memory as orders collapsed after developed economies put in place lockdowns to tame the raging virus. Likewise, domestic firms missed almost all major spending seasons because of depressed demand and income losses.

As the cases of infections and deaths from the rogue virus reached a plateau and even started to decline at home and abroad in recent months and economies around the world reopened, buyers began putting in orders, giving exporters a much-needed lifeline.

The businesses focused on the local markets also made a turnaround.

Confidence among the country’s manufacturing and service sectors grew in October thanks to the ongoing economic recovery, according to a new survey.

The Business Confidence Index prepared by the South Asian Network on Economic Modeling (SANEM) rose to 55.24 for the October-December period compared to 51.06 between July and September, on a scale of 0 to 100, with 100 depicting the highest level of confidence.

The improvement is evident in all major sectors: readymade garments, textile, leather and leather engineering, pharmaceuticals, wholesale, retail, transport, information and communication technology and finance.

Production in keyindustries such as jute, textile, yarn, cloth, garments, knitwear, paper, mild-steel and petroleum products, cement, pharmaceuticals, tea and salt all rose in June compared to May, the latest data from the Bangladesh Bureau of Statistics showed.

But if there are new waves of infections as already seen in some export destinations, the recovery for the exporters would be short-lived. In the same vein, a second wave in Bangladesh could mean a return of containment measures and this may drag down economic activity for a second time in less than eight months.

“For Bangladesh, a second wave, if that happens, will be disastrous,” said Shams Mahmud, president of the Dhaka Chamber of Commerce and Industry (DCCI).

Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, said, “Of course, we are worried. We have to observe the situation with caution.”