Economy showing signs of recovery

It is a good sign that listed companies across all sectors have seen their profits rise by 8.6 percent on average in the first quarter of the ongoing fiscal year, as it indicates that the economy is on the path to making a strong recovery from the Covid-19 pandemic. The collective profits of 288 listed companies stood at Tk 7,203 crore in the July-September period of 2021-22, up from Tk 6,631 crore a year earlier, according to Sandhani Asset Management Company. Some experts have suggested that this is a sign of the economy returning to normalcy from the pandemic-induced slowdown.

The increased earning also has the potential to have a multiplier effect. As earnings go up, business and consumer confidence could go up, leading to a net positive effect on the economy in the foreseeable future. Investment, which also took a big hit during the pandemic, may rise as a result of increased confidence. This could provide the economy with another much-needed boost.

On the other hand, some experts have warned that the economy is still some way off from recovering. For example, according to data from various private organisations, poverty in the country has gone up significantly due to the pandemic. And the increase in the profits of listed companies could be due to rising exports—not because of higher domestic demand. Another thing to consider is the fact that most listed companies are large corporations, and it is mostly the micro and small businesses that are still struggling to recover from the pandemic—and their performance has a much bigger impact on the overall economy. Given that the country's employment rate and other economic factors are largely dependent on small businesses, relying on data that only considers the profits of listed companies to judge overall economic performance could be a mistake.

Despite the contradictory pictures that could be drawn from the available data on listed companies, the fact that their profits have risen is good news. And although it might be overly optimistic to interpret this data as a sign of full economic recovery, it does signify that the economy is showing some signs of rebounding from the pandemic. Therefore, now is the perfect time for policymakers to provide the type of support that is needed for a quick and full recovery. In line with that, we hope the concerned authorities are constantly working with experts and industry stakeholders to formulate policies that can help businesses thrive and the economy recover fully.