The Covid-19 pandemic has brought production all around the world to a halt. This has significant implications for the world economy as experts suggest that even without recent economic data, it can be surely said that the global economy is already in recession. This issue of Policy Insights includes an article which details the efforts taken by global economic juggernauts to tide the wave of the Corona pandemic and suggests policy tools to tackle this unforeseen global catastrophe.
Bangladesh is experiencing a rapid slowdown in export growth for the first time in many years. The government’s immediate response to such a slowdown in export growth is to initiate its complex export subsidy policies. However, the question is, do these measures really work? Basic economics would suggest that it is a lose-lose policy instrument which raises the domestic price of the good in the exporting country and lowers the price in the importing country.
Timely and appropriate policy response depends a lot on how often national accounts data are updated. One of the articles looks at various financial and external sector indicators to give a slightly different picture of the real economy. Questioning various statistics, the article finally recommends improvement in national accounts data standard and frequency, for taking the right decisions while learning from the fall in India’s growth in the midst of other global challenges.
Asian countries are at the forefront of development. An ADB study suggests, with current growth trajectories, Asia will account for half of the GDP generated in the world. An article in this issue talks about the resurgence of Asia as an economic powerhouse. This Asian phenomenon connects some 5 billion people of many ethnicity – yet distinctly Asian – through trade, industry, finance, infrastructure, and cultural networks, accounting for 40% of 2018 GDP.
The whole South Asia region is experiencing a sharp economic slowdown. Bangladesh’s growth this year too is showing signs of yielding to policy and trade logistics constraints, financial sector stress, continued high cost of doing business and slow progress in developing balanced infrastructure. The spread of coronavirus too has dampened the growth prospect with trade worth USD 2 billion at risk reportedly. Once again, one of the articles was quick to look beyond the questionable growth statistics, identifying credible and transparent national accounts data compilation as the starting point for developing appropriate solutions.
This issue also includes an article which discusses the statistical discrepancy in GDP measures in Bangladesh. Adoption of Supply and Use table would improve GDP calculation. However, revision and rebasing of GDP at reasonable intervals are also strongly recommended for accuracy, structural changes and comparability.
And finally, the last article gives a detailed picture of the current state of the economy, analyzing the growth performance and specific developments in the monetary and fiscal managements, among other economic indicators. The detailed article shows downward movement in several short run-indicators pointing out to challenges that need to be addressed immediately, with increasing vulnerabilities and uncertainty on the external front. Capitalizing on the country’s demographic dividend will be key to harness the growth prospect, going forward.