The country's elite trade body MCCI has identified a number of factors, including decline in foreign exchange reserve, supply-chain disruptions, global oil-and food-price spikes, and a rise in inflation following the Russia-Ukraine war, affecting the recovery of Bangladesh economy from the Covid-19 pandemic shock.
Besides, slowdown in external demand, weak remittance inflow, negative current account balance and depreciation of the Bangladesh Taka are also taking a toll on the country's economic recovery process, according to the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI).
"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, 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," the MCCI said in its Review of Economic Situation in Bangladesh for October-December, 2022 (Q2 of FY23).
The country's premier trade organisation also suggested that the government should intensify its actions to keep foreign exchange reserves stable, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply for economic activities, and extend social safety net programmes.
It, however, mentioned that the government had already taken quick and decisive measures to address the economic fallout.
However, the MCCI said the economy in the Q2 of FY23 showed some signs of improvement with the export earnings facilitating economic recovery.
The export-oriented garment, leather, plastic, jute and domestic market-oriented steel, food-processing and transport sectors run at full scale, it said.
On the other hand, the import payments and inward remittances decreased, causing multiplier effects on other economic sectors.
According to the MCCI, the country's foreign currency reserve is still somewhat in a satisfactory position but into a weaker trajectory.
It mentioned that the overall inflation in August rose to 9.52 per cent, then gradually decreased, reaching 8.71 per cent in December 2022.
"The exchange rate has long remained stable but depreciated notably in December 2022 in terms of US dollar," it said.
The country's export earnings, which were estimated at over US$ 5.13 billion in January last, might cross $5.23 billion and $5.28 billion for the months of February and March, 2023, respectively.
The country's overall import values would also stand at about $6.19 billion at the end of February and cross $6.2 billion by March-end from the estimated amount of $6.12 billion in January last.
Besides, it also projected that the volume of inward remittances would cross $2.07 billion at the end of this month.
On the other hand, the country's foreign exchange reserve might surpass $33.12 billion at the end of this month (March) from that of $32.22 billion in January last, according to the MCCI projection.
However, the inflation might come down to 8.50 at the end March, it projected.
© 2024 - All Rights with The Financial Express
