BB fears vaccine uncertainty might hamper economic recovery

The Bangladesh Bank (BB) raised concern on the second wave of Covid-19 and uncertainties regarding the quick availability of vaccine for the growth outlook in the near and medium term. 

The observation came at a quarterly report of July-September that Bangladesh Bank released on Tuesday.

The central bank emphasised on enhancing implementation of stimulus package for maintaining the growth momentum and macroeconomic stability.

"The pace of recovery in economic activities during the quarter may continue in the coming quarters, aided by appropriate policy support. However, the severity of Covid-19 second wave, uncertainties regarding the quick availability of vaccine and its effectiveness and slower global economic recovery are the concern for growth outlook in the near and medium term," said the report.

"Enhancing the implementation of stimulus packages in a proper way and keeping effective vigilance are required for maintaining growth momentum and macroeconomic stability," the report added.

The second wave with new variant of virus already disrupted air connection worldwide this week raising concern of further slowing down in economic activities, which started to resume in recent months.

The Bangladesh Bank in its report said that during July-September period economic activities gained momentum after Covid-19 pandemic-driven slowdown, supported by an upsurge in the industry sector, fairly performed service sector and resilient agriculture sector.

Large and medium scale manufacturing output experienced an upsurge, reflecting strengthened export demand. The service sector achieved robust and fair performance supported by considerable growth in bank credit to trade and commerce and consumer finance along with increased volume of cargo handled through ports. 

The agriculture sector was resilient despite flooding along major river systems of the country and impaired supply chain amid Covid-19 situation. On the other hand, strong growth in remittance inflows, rise in imports, recovery in private sector credit growth, and high government spending for implementing the stimulus packages supported domestic demand.