Political clarity boosting economic confidence

Bangladesh's economic confidence has improved following the announcement of a firm election timeline, ending political uncertainty that had been weighing on investor sentiment, according to Finance Adviser Salehuddin Ahmed.

"A clear timeline for elections has removed the uncertainty in politics," Ahmed told reporters after a meeting of the Cabinet Committee on Government Purchase yesterday. "Politics is important for any economy. But nothing has happened in recent months that would disrupt our economic momentum," he said.

Ahmed said global stakeholders, including the World Bank, had raised questions in recent months about whether elections would be held on time. "Even in the World Bank meetings, I was asked when elections would take place," he said.

But with the timeline now set, he said, "There's a general sense of satisfaction."

The finance adviser also pointed to recent approvals of budget support from major development partners, including the International Monetary Fund (IMF) and the World Bank, as evidence that confidence is returning.

"They are broadly satisfied with the reforms we are undertaking," he said.

However, he acknowledged that concerns remain regarding overall governance, the rule of law and investor confidence -- areas the government is working to improve.

Ahmed said the government was taking steps to restore trust among businesses and would soon hold a press briefing to clarify the real state of the economy.

"There are often reports based on incomplete or inaccurate information. We will address that."

The purchase committee yesterday approved procurement deals worth Tk 11,649 crore, including contracts for liquefied natural gas (LNG), petroleum, fertiliser and wheat.

Among the contracts, Vitol Asia won a deal to supply one cargo of liquefied natural gas at $13.52 per MMBtu for the July 28-29 delivery. The purchase proposal was placed by Rupantarita Prakritik Gas Company.

Separately, Dubai-based Cereal Crops Trading will supply 50,000 tonnes of wheat at $275 per tonne to the Directorate General of Food.

Ahmed said Bangladesh had avoided cost spikes in global markets despite tensions in the Middle East and fears of supply disruption in the Strait of Hormuz.

"We acted in time. As a result, in many cases, we saved money," he said, citing energy imports that came in $5-$10 cheaper per unit and led to savings of as much as Tk 80 crore.

A favourable wheat deal also saved the government an additional Tk 20 crore, he said.