Expand exports, stimulate investment for 10pc growth: MCCI
The government needs to accelerate economic growth to about 10 per cent, expand exports and stimulate investment to establish a middle-income country by 2021, said the Metropolitan Chamber of Commerce and Industry, Dhaka yesterday.
In its October-December economic review, the chamber said most local economic indicators were facing an uncomfortable ride amid a gloomy global economy.
"Some economic indicators such as remittances, inflation, foreign exchange reserves are positive in December 2019. The economy, however, faced a number of challenges on its business and fiscal fronts in recent times, even though the political atmosphere has been peaceful," it said.
Remittance inflows during the quarter increased by 34.64 per cent year-on-year to $4.88 billion as the government announced a 2 per cent incentive on receipts.
The chamber said challenges that need to be addressed properly were inflationary pressure, slower export and import growth, shortfall in tax collection, vulnerable banking sector and slow credit growth to the private sector.
Other areas that need focus include fall in the key indexes of the capital market, lack of investor confidence and a lower rate of investment, specially foreign direct ones, it said.
Bangladesh's economy grew 8.15 per cent last fiscal and Bangladesh Bank forecasts an 8.2 per cent GDP growth in the current fiscal.
However, World Bank and Asian Development Bank predicted it to be 7.2 per cent and 8.0 per cent respectively.
During the July-December period of this fiscal, agriculture, manufacturing and services sectors all performed well but continuous government support of various types will be needed to sustain their growth, the chamber said.
"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," it said.
The MCCI said the government should adopt adequate steps to overcome these problems, and achieve and maintain political stability, which were essential for creating an investment-friendly climate so crucial to achieve higher economic growth.
In addition, the government will need to improve the country's road, river and rail infrastructure, develop port facilities, increase power and gas production, and remove other infrastructure bottlenecks, it said.
The chamber said remittances have kept on increasing, exchange rates remained stable and foreign exchange reserves rose to a comfortable level during the quarter.
Export earnings from merchandise in the first half of the current financial year decreased by 5.84 per cent year-on-year to $19.30 billion.
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