The economy faced multiple challenges in the last six months despite political calm in the country as fragile banking sector and wobbly stock market, among other negative factors, undermined the stability.
Metropolitan Chamber of Commerce and Industry (MCCI) has made the observations in its second quarter review of the current fiscal year on Bangladesh economy, where most of the economic indicators are facing uncomfortable ride amid a gloomy global economy.
“The challenges that need to be addressed properly are inflationary pressure, slower growth in the export and import, shortfall in tax collection, vulnerable banking sector, slow credit growth to the private sector, fall in the key indexes of the capital market, lack of investor confidence and a lower rate of investment, especially FDI,” reads the review.
The MCCI review underscored accelerating the rate of economic growth close to 10% from the present 8.15%, expanding exports and stimulating investment to become a middle-income country by 2021.
Infrastructural deficiency and faulty transmission capacity of gas and electricity supply are undermining the performance of all manufacturing sectors of the economy, it says.
“During July-December of the current fiscal year, agriculture, manufacturing and services sectors — all performed well, but continuous government support of various types will be needed to sustain their growth,” adds the MCCI review.
However, 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 chamber adds.
The government should take adequate steps to overcome these problems, and achieve and maintain political stability, which are essential for creating an investment-friendly climate, which is so crucial to achieve higher economic growth, it urges.
Meanwhile, some economic indicators such as remittance, inflation, foreign exchange reserves were 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.
While remittances have kept on increasing, exchange rate remained stable and foreign exchange reserves rose to a comfortable level.
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 and such impediments as the delay in the execution of development projects, lack of skilled manpower and insufficiency of industrial land.
