The Metropolitan Chamber of Commerce and Industry (MCCI) has underscored the need for taking quick and decisive measures to rebound the country’s economy, the trade body suggested at its recently published quarterly review.
In the review, the MCCI observed that Bangladesh’s robust economic recovery from the COVID-19 pandemic has been interrupted by the war in Russia-Ukraine, resultant supply-chain disruptions, global oil-and food-price spikes, the slowdown in external demand, weak remittance inflow, rise in inflation, negative current account balance, depreciation of the Taka and a decline in foreign exchange reserves.
To overcome the pressure, the government took quick and decisive measures to address the economic fallout. The government also needs to take more actions to stable foreign exchange reserves, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply for economic activities, and extend social safety net programs.
However, in the quarter under review (Q2 of FY23), the economy has been showing some signs of improvement. Export earnings have facilitated economic recovery. The export-oriented garment, leather, plastic, jute, and domestic market-oriented steel, food-processing, and transport sectors are running at full scale.
The import payments and inward remittances, however, decreased, which has multiplier effects on other economic sectors. Foreign currency reserve is still somewhat in a satisfactory position but into a weaker trajectory. The overall inflation in August rose to 9.52%, then gradually decreased, reaching 8.71% in December 2022.
The exchange rate has long remained stable but depreciated notably in December 2022 in terms of the US dollar.