In its report ‘Global Economic Prospects 2020’ published on Monday night, the World Bank observed that the decline in growth rate is forecast as the recovery in industrial production in the country has been reversed due to COVID-19 related disruptions such as mitigation measures and global export plunge and fall in remittances.
The report says that Industrial and services activity has declined sharply in the South Asian Region (SAR) leading to sharp fall in production and sale in key sectors like Ready Made Garment (RMG) in Bangladesh. It points out that COVID-19 infections are still rising in the SAR leading to a highly uncertain outlook with possibility of large downside risks for the economies in the region.
The World Bank report says that Bangladesh has extended a fiscal support package to the COVID-19 hit sectors with subsidies on interest payment, food distribution, targeted cash transfer to the poor and agricultural lending all amounting to almost 2 percent of GDP.
The report notes that the projected decline in the world economy envisions the deepest global recession since World War II. The overall contraction in the global GDP in 2020 is projected to be 5.2 percent which is the deepest global recession in decades. However, the South Asian region is predicted to contract by 2.7 percent in 2020. The report says that the global growth will revive modestly to 4.2 percent in 2021.