The country's overall business confidence index during the second half (H2) of 2014 slipped by 0.39 percentage points to 9.74 per cent over the first half of the year, according to a survey.
The report of 3rd Bangladesh Business Confidence Survey (BCS), carried out by Business Initiative Leading Development (BUILD), was revealed in a programme at Dhaka Chamber of Commerce and Industry (DCCI) auditorium on Thursday.
Such decline was attributed to various factors, like political situation, electricity prices, transportation situation and cost, corruption, interest rates, petroleum prices and profit tax rates.
"The overall business confidence index for July to December 2014 (9.35) was lower compared to that of January to June 2014 (9.74)," mentioned the report.
It opined that continued efforts on business climate reforms are critical to boost up confidence and sustain the growth momentum.
It said the decline in business confidence is also due to decline in confidence about input and infrastructure, business environment, access to finance, legal environment and business regulation.
However, the businesses think the confidence for January to June 2015 to be higher (9.37), as they are hoping that labour relations, employment scenario, trade facilitation, telecommunication, electricity supply, internet connections and availability of skilled labour indicators will improve in January to June 2015.
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Bangladesh Bank (BB) deputy governor Md Abul Quasem was present in the report launching programme as the chief guest. DCCI vice president Shoaib Choudhury presided over it. BUILD chairman Asif Ibrahim delivered the address of welcome.
BUILD CEO Ferdaus Ara Begum, and Associates for Development Services Limited (ADSL) research coordinator Syful Haque presented the findings to the audience.
Ministry of commerce (MoC) additional secretary Amitav Chakrabarty was among others, present on the occasion.
The survey has been conducted between February 06 and March 06, 2015, covering 400 businesses in Dhaka and Chittagong. The businesses include manufacturing and service enterprises in food, textiles, garments, leather, chemicals and pharmaceuticals, electronics and light engineering, wholesale and retail, hotel and restaurants, transport and communications, cyber and telecommunications and real estate sectors.
The survey report mentioned that investment (% of GDP) for Bangladesh was 29 per cent in 2014. The investment-GDP ratio should be 32 per cent in order to achieve growth at 8.0 to10 per cent rate to make Bangladesh a middle-income country by 2021.
It said investment decision could be significantly influenced by changes in business confidence. Uncertainty about future could reduce confidence, leading to firms' postponing their investment decisions until confidence returns.
Therefore, understanding business confidence is important for a country that requires large-scale investment to grow. All developed and many developing countries undertake this sort of surveys to understand the confidence of the business enterprises.
The business confidence is designed to capture the pulse of the private sector's perceptions regarding the state of their operating environment, it also said.
"BUILD's targets are ambitious - creating two million jobs through at least $10 million investment and 40,000 new small and medium enterprises (SMEs)," said Asif Ibrahim.
He said BUILD is a public private dialogue (PPD) platform in Bangladesh for an exchange of actionable ideas between the public and the private sectors.
Md. Abul Quasem said Bangladesh needs large-scale investment to become a middle-income country by 2021.
He also praised BUILD's survey and opined that its findings can be useful for assessing the country rating of Bangladesh.
talhabinhabib@yahoo.com
