Job creation in the next fiscal year will remain a challenge amid low levels of investment and private sector credit growth, and the falling trend in overseas employment in recent months, analysts said.
“We cannot be optimistic about job creation, given political instability and low investment,” said Zaid Bakht, research director at Bangladesh Institute of Development Studies.
These factors caused a fall in imports that resulted in a decline in jobs in the services sector, including financial intermediation and wholesale retailing, he said.
The private sector credit growth of 12 percent in April is the lowest in the last ten years, while the private investment to GDP ratio of 19 percent is the lowest in six years. Domestic savings also stagnated, dropping to the lowest in 10 years.
Around 18 lakh jobseekers enter the job market every year. Of them, nearly six lakh find jobs overseas. A part of the rest is absorbed by the local market, while others remain unemployed.
The number of those absorbed in the local job market depends on economic activities driven by credit growth to the private sector, and investment.
However, economists are making gloomy predictions for infrastructural weaknesses and political instability at present.
The outlook of the overseas job market is also not encouraging.
On average, six lakh Bangladeshis migrate abroad for jobs a year, but in the first four months this year, a total of 139,907 workers migrated to different countries. Trends show that the number would be slightly more than four lakh next year.
A reduction in the recruit of Bangladeshi workers by the United Arab Emirates and Saudi Arabia, the two largest labour markets, accounts for the decline in labour migration, said BIDS Senior Research Fellow Anwara Begum.
Anwara said, even though Bangladesh has made a state arrangement to send workers to Malaysia, it has not gained pace yet.
She suggested the government should focus more on small and medium enterprises, diversification of rural economy and labour-intensive industries for job creation.
Bangladesh received more than $14 billion remittances last year, with an average growth of 12.8 percent in the last four years. In his budget speech, Finance Minister AMA Muhith said he expects the growth to be 15 percent next fiscal year.
Experts said remittance growth may be the same but the government must make efforts to ensure that migrants' earnings go up, and migration costs drop.