The uncertainty prevailing across multiple sectors of the country, particularly the economic sector, has become one of the most pressing concerns in the wake of the recent political transition. Financial irregularities, including monstrous misconduct in the banking industry, have compounded the already daunting challenges of high inflation, a fast depleting foreign exchange reserve, dwindling productivity, and a sluggish trade environment that has been persisting for some time. These factors, if left unchecked, could further deteriorate the situation, making it increasingly difficult for the interim government to restore stability and order. However, amid these troubling indicators, there are some encouraging signs. The Metropolitan Chamber of Commerce (MCCI), in its latest economic review for the last quarter (April-June) of FY 2023-24, has highlighted certain positive trends and opportunities, while also acknowledging the significant challenges that lie ahead. These signs, while modest, suggest that with decisive action and sound policy, there is a road to recovery.
The MCCI review noted that although the overall economic environment remained strained due to several factors, there are positive indications to suggest that the economy may rebound with time. The chamber made projections on some selected economic indicators for the first quarter (July-September) of the current fiscal year (FY 2024-25). It said imports would increase in the next couple of months. August imports may rise to US$5.5 billion and those of September to $5.8 billion. Overseas remittance is also likely to grow reaching $2.18 billion in August and at $2.29 billion in September. Gross foreign exchange reserves may rise to $26.85 billion at the end of August and to $27.95 billion in September --- a heartening uptick for the waning reserves. The review said the rate of inflation may start declining from the next month, dropping below 10.0 per cent. The NBR's tax revenue collection grew by 14.86 per cent to Tk 3.24 trillion in July-May of FY24 compared with that of Tk 2.82 trillion in the same period of FY23. The services sector exhibited growth, with a 4.97 per cent increase in the third quarter of FY24, up from 3.06 per cent in the previous quarter. As for export, the review did not make any projection as the Export Promotion Bureau (EPB) has suspended publishing data from June this year due to data mismatch.
Noting the projections, the MCCI also warned that one of the most pressing issues is persistent high inflation. The 12-month average inflation rate for FY24 stood at 9.73 per cent, compared with that of 9.02 per cent in FY23. Food inflation slightly decreased to 10.42 per cent in June from 10.76 per cent in May. Meanwhile, non-food inflation marginally dropped to 9.15 per cent from 9.19 per cent. The quality of inflation data, compiled by the BBS and quoted by the MCCI, however, deserves scrutiny since the July data released by the BBS depict a different picture.
Acknowledgement of the current shortcomings and preparation for the challenges ahead will help the interim government address some of the most pressing issues demanding urgent attention. Tackling inflation should be the top priority for stabilising the market and restoring public confidence. Additionally, fostering economic growth, ensuring social equity, and reinforcing institutional reforms will be essential in building a foundation for sustainable stability.
© 2024 - All Rights with The Financial Express
