High inflation, investment stagnation, energy crunch spotted for policy action

Dhaka chamber-devised EPI replication suggests real-time policy-making

FE REPORT | Published: May 16, 2026 23:24:47

Persistent high inflation, investment stagnation and energy crunch are severely affecting economic stability and escalating the cost of doing business, economists and business leaders have said on revelation by a new parameter.
They observed owing to the failure of traditional indices in capturing immediate economic transitions, evidence-based decision-making at the policy level is becoming significantly constrained.
The observations were made at a seminar titled 'Economic Position Index (EPI): Quarterly Macroeconomic State of Dhaka', organised by Dhaka Chamber of Commerce and Industry (DCCI) at its auditorium on Saturday.
They have suggested expanding the newly launched EPI beyond over-concentrated Dhaka to make it a nationally effective policy tool.
President of DCCI Taskeen Ahmed delivered welcome remarks while its Secretary-General (acting) Dr. A.K.M. Asaduzzaman Patwari presented the keynote paper.
Noted economist and Chairman of the Policy Research Institute of Bangladesh (PRI) Dr. Zaidi Sattar, Professor of Accountancy and Public Policy, Department of Accounting, Faculty of Business Studies at the University of Dhaka Dr. Mizanur Rahman and Director-General, International Trade, Investment and Technology Wing, the Ministry of Foreign Affairs, Dr. Syed Muntasir Mamun, among others, spoke at the meet.
In his welcome remarks, DCCI President Taskeen Ahmed said Bangladesh's economy is currently going through a challenging period marked by high inflation, pressure on foreign-exchange reserves, sluggish investment, energy uncertainty, rising manufacturing costs and declining employment opportunities, all of which are creating pressure on the macroeconomy.
"The country's conventional macroeconomic indicators and measurement systems are failing to accurately reflect the real-time economic condition and short-term changes, thereby limiting effective policy responses," he told the audience.
In this context, the EPI developed by DCCI is a timely initiative that will help policymakers, entrepreneurs, and researchers take effective decisions based on actual economic conditions. Dr. A.K.M. Asaduzzaman Patwari said the DCCI has undertaken the initiative to develop the EPI on a quarterly basis to address the lack of adequate information regarding business, trade, investment planning and economic forecasting.
Considering the concentration of industrial activities, the research was conducted in Dhaka using data collected during the first quarter (July-September) and second quarter (October-December) of the financial year 2025-26.
He mentions that the data for this index were collected from 762 respondents, including 330 representatives from the manufacturing sector and 432 from the services sector.
He further notes that analysis of the survey findings revealed that climate change is adversely affecting the agricultural sector, particularly food production, energy shortages have caused stagnation in industrial production and declining purchasing power is hindering the growth of the services sector.
To overcome the current challenges, he emphasizes the need for market price stabilization and supply-chain improvements to protect farmers' interests, easy and low-interest loans for CMSME entrepreneurs, uninterrupted energy supply for industries, infrastructure development, reduction in time and harassment in obtaining trade-related licences, lowering existing VAT rates and accelerating cargo- inspection and- clearance procedures at ports.
Dr. Zaidi Sattar said though the research was conducted focusing on Dhaka, its acceptability and effectiveness would increase significantly if it can be replicated nationwide.
"Such an index would help entrepreneurs to assess the current business climate and take appropriate measures accordingly."
Professor Dr. Akhand Mohammad Akhtar Hossain, Chief Economist, Bangladesh Bank, stated that there is no alternative to Foreign Direct Investment (FDI) for increasing economic growth, an area in which Bangladesh is still lagging behind.
Miah Rahmat Ali, Senior Private- Sector Specialist, the International Finance Corporation (IFC), World Bank Group, emphasized that the government must come forward with necessary policy and financial support for entrepreneurs to tackle global economic instability caused by wars and climate change.
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