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Economic environment uncertain due to policy inconsistencies: Survey

Staff Correspondent
05 Mar 2023 15:35:59 | Update: 05 Mar 2023 17:21:25
Economic environment uncertain due to policy inconsistencies: Survey
— The Business Post Photo

Bangladesh’s economic environment has become full of uncertainties due to policy inconsistencies, according to the Business Confidence Survey (BCS) 2022-23.

Some 88 per cent of respondents from the manufacturing industry and 43 per cent from the service sector voiced such a concern in the study conducted by the Business Initiative Leading Development (BUILD) in collaboration with USAID Feed the Future Bangladesh Trade Activity.

Industries Minister Nurul Majid Mahmud Humayun unveiled the survey on Sunday at a hotel in the capital. It was conducted from September to November last year.

The respondents were from 567 firms representing Bangladesh’s micro, small and medium enterprises (MSME) and large firms, both from the manufacturing and service sectors. They also raised concerns over the increasing cost of production.

BUILD CEO Ferdaus Ara Begum presented the event's keynote, while its Chairperson Nihad Kabir delivered the welcome speech.

The overall business confidence index (BCI) 2022 stood at 74.4, giving an optimistic perception of business conditions over the next six months (January-June, 2023).

Meanwhile, the BCI for textiles and the RMG sub-sector of the manufacturing sector was 79.6 on a scale of 0-100. The index of the overall business cost was only 4.3, which is the lowest score in this survey.

As textiles and RMG industries are heavily dependent on imported raw materials, the cost is the biggest concern. However, the sector is very optimistic regarding the volume of orders over the next six months, thus planning to increase employment and investment.

Utility and cost of materials are tick-marked by most of the respondents (95 per cent) as the main cost of doing business for the manufacturing sector, followed by the cost of rent and equipment (94 per cent).

The cost of utility (66 per cent) is the main factor for the service sector followed by the cost of rent (53 per cent).

Among others, USAID's Feed the Future Bangladesh Trade Activity Chief of Party Marc Shiman, International Finance Corporation Country Manager Bangladesh, Bhutan, and Nepal Martin Holtmann, Export Promotion Bureau Vice-Chairman AHM Ahsan, BIDA Executive Member Mohsina Yasmin, and DCCI President Md Sameer Sattar also spoke at the event.