Bangladesh’s macro-economic situation will show recovery at the end of first quarter [July-September] of FY25. Indicators such as import, remittance, forex reserves and inflation will show improvement during that time.
The Metropolitan Chamber of Commerce and Industry (MCCI) made the projection in its latest report titled “Review of Economic Situation in Bangladesh Q4 of FY24.”
However, some issues such as smooth logistics, banking services and security in industries must be addressed to ensure revival of economic activities, read the report while highlighting several challenges for the interim government.
Some of the challenges are the rise in inflation, slowdown in external demand, weak remittance inflow, shortfall in revenue collection and slow public expenditure, depreciation of the Taka and a decline in foreign exchange reserves.
Low investment and unemployment are also challenges, mentions the report. But industry insiders believe this is one of the key challenges for the interim and upcoming government.
Speaking with The Business Post, former president of Dhaka Chamber of Commerce and Industry (DCCI) Abul Kasem Khan said, “Emphasis should be placed on creating entrepreneurship for employment generation.
“One entrepreneur can create at least ten employment opportunities. Barriers to creating new entrepreneurships should be removed. Besides, if ease of doing business can be ensured, the existing industries will move forward, which will contribute to the creation of new jobs.”
According to the Labour Force Survey of Bangladesh Bureau of Statistics (BBS), the estimated number of unemployed people in the country was 2.47 million at the end of 2023, and the unemployment rate was 3.36 per cent.
The number of unemployed people was 2.58 million at the end of 2022 and the unemployment rate was 3.53 per cent.
The most alarming issue is the number of people outside of work standing at 47.18 million. Experts believe that they are not involved in any work and it may cause social unrest.
To overcome these economic challenges, the government took some decisive measures to address the economic fallout, read the MCCI report.
But it suggested that the government also needs to take more actions to stabilise foreign exchange reserves, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply for economic activities, and protect small businesses.
DCCI ex-president Abul Kasem Khan said, “Amid a changing situation, the people who are holding key positions in regulatory institutions relevant to the financial sector are generating confidence in the business community.
“We believe that this confidence will bring positive changes in the economy in the coming days. However, the current government should give more importance to ensure the safety of industrial factories.”
The MCCI report stated that during the quarter under review (April-June of FY24), the economy had shown some signs of improvement with increase of foreign exchange reserves and remittances in June 2024.
Later on, Bangladesh witnessed massive mayhem in the backdrop of protests by students against the quotas in government jobs over a few weeks, which dealt a blow to people's normal life and business.
After the Awami League government fell, the interim government had just taken over power, and it would take time to normalise the business activities.
On August 25, Chief Adviser of the interim government Dr Muhammad Yunus in his speech to the nation said, “We have taken initiatives to ensure good governance in the banking sector, which has become an arena of looting and corruption.
“Skilled manpower is being recruited in this sector. We have taken initiatives to establish order in the banking sector, create conducive business environment and bring the prices of daily necessities and inflation to people's lives easier.”
The chief advisor then mentioned, “The banking commission is essential for long term reforms in the sector. A white paper will be prepared about the overall situation and reforms in the financial sector and will be made public soon.
“Where there is extreme chaos in the stock market and transportation sector, quick steps are being taken to resolve these issues.”
