Bangladesh's ability to diversify its export products and markets to follow the international buyers' sourcing diversification strategy is going to play a significant role in the country's economic outlook in 2023, said Naser Ezaz Bijoy, president of Foreign Investors Chamber of Commerce and Industry (Ficci) and CEO of Standard Chartered Bank, Bangladesh.
"We need to be mindful that the depressed import for a longer period will have adverse impact on production, the impact of China's return to normalcy on commodity, and demand in export destinations of our products -- especially apparels," he also said.
The good news is that global prices of major commodities have come down by 30-40% from the peak, with combined efforts of the central bank and the commercial banks. Besides, letter of credit (LC) issuance and settlement has come down significantly, and there is an expected inflow of loans from multilateral partners, he added.
All of these should start contributing to the improvement of the forex liquidity situation in the first quarter (Q1) of 2023, Bijoy further said.
Organizations with nimble cost structure and ability to respond promptly to market changes are likely to fare better than the others.
Bijoy also noted that 2022 was yet another challenging year, as after a vibrant Q1 of economic activities and while on the path of strong recovery from global onslaught of the pandemic, the world had to face another strong headwind from geo-political fallout of the Russia-Ukraine war.
The world saw elevated levels of inflation, followed by an unprecedented synchronized global monetary policy tightening. These created an adverse impact on volatility of interest rate, foreign exchange and commodity prices in global as well as in local markets.
"However, we believe that the long-term potentials of Bangladesh should not be defined by the near-term challenges," he added.