The nation's economy greatly suffered in both July and the first week of August when it went through its worst disruptive time in history, thanks to the bloody struggle the students and the masses waged to topple autocracy. Every sector of the economy suffered badly. Especially, agriculture, manufacturing, construction and the service sectors were the hardest hit by the upheaval. The disruptions in the supply chain that the nationwide violence caused showed up in the results of surveys conducted to measure the direction of economic trends. Based on the views of purchasing managers on whether the market conditions are expanding, staying the same or contracting, the Purchasing Managers' Index (PMI) is prepared. Obviously, in the better part of the month after August 5 last, when the intensity of the revolution had died down, some improvement was visible and the overall economy began to look up which the PMI for August reflected. In fact, compared with the July reading of PMI, when it dropped by 27 points signifying a considerable contraction to 36.9, it gained 6.6 points to a commendable 43.5 last month. Though the PMI remaining still below 50 means the economy is contracting, the improvement lies in the fact that the rate of contraction has markedly slowed down. As it came out, the contraction, though somewhat decelerated, has been attributed to the retarded growth in all the four key sectors of the economy-agriculture, manufacturing, construction and services.
As PMI provides information on developments in the economy on a monthly basis, such indicators reflecting the August's trend which is rather positive will definitely impact the decision-makers of the businesses and investors from home and abroad accordingly. Given the firm steps being taken by the interim government to restore, discipline and establish good governance in the financial sector, business's confidence in the economy, it is believed, will continue to grow in the coming months. Notably, different aspects of the economy and the business were not contracting or expanding uniformly last month. For instance, the manufacturing has been registering contraction at a slower rate in the areas of getting new orders and factory output. But the picture was quite reverse when it came to the areas of employment, purchase of inputs, production of finished goods and the quantity and value of products that were ordered by customers but could not be shipped. That means these areas of the manufacturing sector suffered fresh setbacks.
The good news is that the lack of performance in certain aspects of the economy and business is being compensated by better performance in other areas. Overall, the picture is not as bad as it looked even a few weeks before. The credit for all that goes to the ultimate determiner, the political governance which has finally brought semblance of stability in the economy. Foreign buyers of Bangladesh goods feel encouraged to re-engage and place fresh purchase orders.
To corroborate this point, the (PMI) indices for new exports, for instance, show that those have reverted to the expansionary territory. This is undeniably a heartwarming development, particularly against the backdrop of massive fabrication of export data by the Export Promotion Bureau (EPB) in the past. The actual exports in the July-April period of FY24 were, for instance, lower by about US$14 billion than the shipment value of goods published by EPB, according to the central bank's calculation. This practice of supplying inflated export data had reportedly been going for over a decade. The incumbent interim government has already made its mark, let its economic performance scale still higher notches to the nation's relief.
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