Economy growing well but challenges remain: MCCI
Bangladesh’s economy is progressing well despite inflationary pressure, slower growth in export and imports, lack of investor confidence and a lower rate of investment, the Metropolitan Chamber of Commerce and Industry, Dhaka said yesterday.
In its review of the economic situation for July-September, the chamber said the overall economic situation was positive as indicated by steady improvements in the major economic indicators in the quarter under the review.
Agriculture, manufacturing and services sectors all performed well, but continuous government support of various types will be needed to sustain their growth.
Infrastructure deficits and gas and power supply problems along with faulty transmission capacity are now undermining the performance of all productive sectors of the economy.
“The government should adopt adequate steps to overcome these problems and achieve and maintain political stability, which are essential for creating an investment-friendly climate and crucial to achieving higher economic growth.”
The MCCI said it is assumed that the political situation will remain stable and peaceful in the coming days.
It said major macroeconomic indicators like the growth rate of GDP, per capita income, remittances, foreign currency reserves, and foreign direct investment show a positive trend.
Merchandise exports slipped 2.95 percent year-on-year to $9.65 billion in the first quarter. The earnings also fell short of the strategic target by 11.06 percent.
Import payments during the first two months, for which data are available, stood at $9.32 billion, which is 2.29 percent lower than the payments made during the corresponding months in the last fiscal year, mainly due to lower imports of petroleum and petroleum products and capital machinery.
The inflow of remittances in the quarter rose 17.58 percent to $4.55 billion year-on-year, on the back of the government’s 2 percent incentive on remittance receipts and better exchange rates.
Disbursement of foreign aid decreased by 5.62 percent to $940.80 million in the first quarter. Foreign aid commitment stood at $2.01 billion against $1.82 billion in the same period a year ago.
In the first two months of the fiscal year, net FDI was up by 7 percent to $428 million year-on-year.
“FDI inflow to Bangladesh is low compared to that in many countries at similar level of development,” the chamber said.
Trade deficit narrowed by 6.16 percent year-on-year to $1.98 billion in July and August.
The stock markets continued to suffer mainly due to a confidence crisis during most of the time in the first quarter. Key indicators at both Dhaka and Chattogram stock exchanges – broad index, turnover and market capitalisation – declined markedly.
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