An Economic Plan for Mitigating COVID-19 Shocks in Bangladesh

Abstract

The world economy is facing an unprecedented economic slump because of the outbreak of coronavirus-2019 pandemic. Bangladesh is no exception in this crisis. Like many others, Bangladesh is also facing a risk of economic contraction. This unforeseen but truly exogenous COVID-19 shock is now interacting with already prevailing many economic woes of Bangladesh. Those include stagnant tax revenue, widening fiscal deficits, prohibitive liquidity and solvency crisis in the country’s financial system, a long depressed stock market, an overvalued exchange rate, and persistent and unsustainable current account deficits in the last few years. How does Bangladesh deal with these complex economic challenges? This note outlines an economic plan for overcoming economic shocks emanating from COVID-19 pandemic.