Price hike of essentials, falling remittance are emerging challenges: MCCI
A recent price rise of essential commodities, decreasing remittances, threat of a new coronavirus wave, and slow vaccine rollout are among the emerging challenges facing the economy of Bangladesh, said the Metropolitan Chamber of Commerce and Industry (MCCI) in Dhaka yesterday.
This was highlighted in an MCCI review of the economic situation for the July-September period.
The chamber said Bangladesh, like many other countries, was struggling because of the higher number of infections and a fear of a new Covid-19 wave during the quarter under review.
However, a reduction in coronavirus infections made a majority of businesses hopeful about the recovery of the economy, it said.
The economy showed some signs of recovery in the first quarter of the current fiscal year. The stimulus packages provided comfort to the business groups, from large firms to microenterprises, which eventually gave a boost to the economy.
Both exports and imports, the two important drivers of the economy, have done well, with the steady rise in overseas sales facilitating the economic recovery in recent times, according to the review.
Export earnings in the July-September period rose 11.37 per cent year-on-year to $11.02 billion, helped by a rebound in garment shipment.
Import payments stood at $18.72 billion, which was 47.55 per cent higher than in the same period a year ago, thanks to the restoration of business and economic activities in the country's major export destinations due to vaccination drives.
The rate of inflation increased in the quarter, largely due to the global supply chain disruptions and a hike in commodity prices in the international markets.
The inflow of remittances went down by 19.45 per cent to $5.41 billion in the quarter.
"This decline in remittances is a reflection of the second wave when many Bangladeshi migrant workers lost jobs. Besides, many others returned home and couldn't go back due to the suspended international flights and unmet vaccination requirements," said the MCCI.
The review says the foreign currency reserve is in a satisfactory position, and the exchange rate has remained stable.
On the other side, some of the economic indicators appear to be less promising than projected earlier, said the MCCI.
"The fiscal framework continues to be weak in view of poor achievements, more specifically, both in terms of revenue mobilisation and public expenditure."
The unemployment situation and low investment are also challenges.
"A significant increase in public and private investment is necessary to maintain competitiveness and generate further growth," the chamber added.