Business confidence jumps as pandemic wanes: study

Businesses in Bangladesh made a stride in terms of recovery from the fallout of the coronavirus pandemic in the third quarter of 2021, helped by buoyancy in exports and resumption of economic activities, said a new survey.

The survey of 500 firms was carried out by the South Asian Network on Economic Modeling (Sanem) between October 10 and 27. It measured business confidence on a scale of 0 to 100 with a score above 50 points marking improvement.

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It found that the present business status index (PBSI) jumped to 52.31 in the July-September quarter from 42.57 a quarter ago.

What is more, the overall PBSI has crossed the 50-point mark for the first time since the survey was launched in July 2020, indicating business activities are improving. This was the sixth round of the survey.

"There have been some visible recoveries in business activities. The improvement is visible in most of the sub-indicators of the PBSI," said Sanem Executive Director Selim Raihan while presenting the findings of the survey at a webinar.

"All economic activities have resumed. The Covid-19 situation has also improved, powering recovery in business activities," he said, adding that faster recovery was observed in the restaurant, garment, textile, and light engineering sectors, among others.

The overall business confidence improved to 60.67 in the October-December period from 49.74 in the previous quarter.

Firms in the sectors such as transport, light engineering, tourism, textile, RMG, and ICT expressed greater confidence in the upcoming quarter, reflecting their optimism about the better prospect in the near future, said Prof Raihan.

Most of the time over the last one and a half years, the business status and confidence were worse for micro, small-and-medium firms compared to large firms, for non-exporter firms as opposed to exporter firms, and for firms from the services sector, according to the survey report.

Twenty-one per cent of respondents observed that Bangladesh was on the path to a strong recovery, versus 27 per cent who said the economy was having a weak recovery.

Fifty-two per cent called the recovery moderate.

The research organisation listed the emerging challenges for the economic recovery, such as fuel price hike, inflationary pressure, falling remittances inflow, and the risk of new Covid-19. It suggested a wider coverage of coronavirus vaccination.

The survey said 46.2 per cent of the firms availed loans in the last one year. Of them, 77.5 per cent borrowed from the formal sector such as banks and the rest took loans from informal sector such as friends, relatives, and cooperatives.

The Sanem also asked the businesses about the problems they faced in getting loans under the stimulus package.

Thirty per cent of the respondents complained that they were asked to pay a bribe for a loan, up from 12 per cent alleged in the fifth round of the survey.

In the latest survey, 75 per cent of firms complained about the lengthy procedure in securing loans, up from 63 per cent in the previous one.