Covid economic recovery Business confidence hits rock bottom03 May 2021
Staff Reporter :
The confidence among businesses about the economic recovery of the country hit the rock bottom due to the surge in infections of the second wave of the Covid-19, according to a survey.
The study also found that 69 per cent of business firms are yet to get the stimulus packages announced by the government to tackle the pandemic, while 9 per cent of the businesses do not even know of the facilities.
The survey conducted by the South Asian Network on Economic Modeling (SANEM) showed that at present 67 per cent businesses think that economic recovery is weak whereas in previous quarter the number was only 14 per cent.
Only two per cent businesses think that the economic recovery is strong at present, whereas in previous quarter the number was 34 per cent, the SANEM unveiled the information in a webinar on Sunday.
The Business Confidence Index showed the overall confidence was at pick 57 points out of 100 in the previous quarter, which came down to 41 points now.
SANEM in collaboration with The Asia Foundation conducted the 4th round of a nationwide firm-level survey with 500 business entities from April 6 to 18, 2021.
Speaking at the webinar, Selim Raihan, Executive Director of the SANEM, said that big firms are doing well as they have better access to government stimulus to fight Covid-19 impact.
"According to our findings only nine per cent small businesses availed the stimulus, in medium businesses it was 30 per cent and large businesses received 46 percent of the stimulus," he said.
SMEs, from all sectors, should be a priority in channeling the loans and stimulus packages, he said.
Dr Zahid Hossain, former lead economist of the World Bank Dhaka office, said the large firms are getting more benefit as they can get closer to the policymakers.
"As they are big, they are strong enough to reach their voices. That could be the reason for big firms getting more access to stimulus," he said. Urging the government to address such issues in the upcoming national budget, he said, "Otherwise, the economy might come to a halt again."
Rizwan Rahman, President of the Dhaka Chamber of Commerce and Industry (DCCI), said that the small and cottage industry is one of the dominant forces and major contributors to the GDP. "Whatever happens, there is huge process cost, time and paperwork involved to provide loan or stimulus to small businesses. So, rather going to 100 SMEs, the banks prefer to go to 10 medium firms," he said.
He said the government should set a target for small business financing and monitor the implementation of the packages properly.