Story of more infections, more deaths…and still higher growth

Official data say Covid-19 has become more devastating in terms of deaths and infections in the current financial year than the previous one, leaving a bigger impact on people's lives and livelihoods.

But Finance Minister AHM Mustafa Kamal has come up with some key macroeconomic data showing better performance of the country's economy this fiscal year than the previous one regardless of the raging pandemic impact.

An analysis of official data by noted economist Debapriya Bhattacharya, convenor of the Citizens' Platform for SDGs, Bangladesh, today questioned the projections by the finance minister in the proposed budget.

According to the analysis, around 11,000 people died of Covid during this fiscal year from July 2020 to 5 June this year while the death toll was less than 2,000 in FY20. Around 7 lakh people tested positive for Covid in FY21 while the number was 1.4 lakh in previous year.

Both the financial years experienced almost the same duration of shutdown. The duration of school closure that severely impacts the economy, however, varies. Schools remained closed for entire FY21. The duration was only four months in the previous year.

The finance ministry is however optimistic about the growth. He revised down the economic growth for the current fiscal year to 6.1% from the projected 8.2%.

Only four months of the last fiscal year was hit by the pandemic. Yet, the flying growth declined to 5.2% from 8.15%, according to the government data though the World Bank and the International Monetary Fund estimated much lower growth.

The current fiscal year began in last July amid raging pandemic and still continues. It has two good months – January and February – to take a breath. But the situation started worsening from March. The current financial year is set to end on 30 June.

"Figures in Covid correlates do not support that FY21 was better than FY20," economist Debapriya Bhattacharya said today while presenting the analysis on the proposed budget.

He said the current financial year does not seem to be better than previous one. "GDP growth rate of 6.1% in FY21 does not consider the second wave of the Covid-19 pandemic," he said.

Projection of growth for the new fiscal year beginning next July seems to be made based on assumptions far from reality.

The finance minister projected 7.2% growth for the coming fiscal year in his proposed budget. 

The future still remains uncertain as nobody can predict exactly how the pandemic will behave in the coming months with new variants raising concerns. One thing however is certain: vaccination now holds the key. Vaccinating a large part of population helps keeping the pandemic under control. Our vaccination programme has stumbled due to shortage of jabs.

The finance minister in his budget speech could not project any timeframe for large-scale vaccination.