Prospective foreign investors have adopted a 'go-slow' strategy in making fresh investments as their confidence in business environment shattered, the Metropolitan Chamber of Commerce and Industry (MCCI) said Saturday.
The MCCI also said investors identified underdeveloped infrastructure, shortage of power and energy, procedural bottlenecks, lack of proper regulatory framework, scarcity of industrial lands, and political uncertainty as major impediments to new investment.
"The government needs to address these impediments to attract more FDI (foreign direct Investment) in the country," the chamber said in its latest quarterly review report on Economic Situation of Bangladesh.
Net FDI increased 5.8 per cent to US$585 million during the July-November period of the ongoing fiscal year (FY) 2014-15.
It noted that this investment is not sufficient for the country's development.
The MCCI, in its review, found broad money (M2) having recorded a lower growth of 12.84 per cent year-on-year (y-o-y) at the end of November 2014.
But its analysis reveals that a higher growth in domestic credits by 10.85 per cent (y-o-y) in the same period, compared to 9.98 per cent at the end of November 2013.
It said the total liquid assets with the scheduled banks stood 5.7 per cent higher at the end of the quarter under review, compared with the quarter as of end June 2014.
Also, the required liquidity (SLR) stood higher as of end December 2014 compared with end June 2014.
The MCCI said excess liquidity of scheduled banks, as of end December 2014, stood lower at Tk 1075.29 billion, compared to Tk 1433.97 billion as of end June 2014.
It said the disbursement of industrial term loans during July-September of FY15 increased by 11.7 per cent over the immediate previous quarter.
The MCCI said that the industrial loans went mostly to energy and power, telecom, pharmaceuticals, textile, food processing, steel and engineering industries.
The chamber said that during October-December the disbursement of agricultural credits and non-farm rural credits by banks decreased by 5.8 per cent, while the recovery decreased by 11.9 per cent.
The rate of implementation of ADP in H1 of FY15 was 28 per cent, 1.0 percentage points above the implementation rate achieved in the corresponding period of the previous fiscal.
During the quarter under review, exports grew 2.3 percent compared to the same period of the previous fiscal.
Import payments during July-November of FY15 stood at US$17.308 billion--5.1 per cent higher than that of the corresponding months of FY14.
"The increase was mainly due to higher import of fuel oils and capital machinery," the MCCI noted.
The disbursement of foreign aid during the first half of the current fiscal increased 14.5 percent to US$1.50 billion from US$1.31 billion in the corresponding period of the previous fiscal year.
On the other hand, the commitments of foreign aid decreased by 35.1 per cent to US$1.0 billion in July-December of FY15 from US$1.54 billion in the same period of FY14. Out of the US$1.0 billion pledged, US$812 million was in loan and US$191.3 million in grants.
The MCCI review says local currency Taka depreciated marginally (by 0.41 per cent) in terms of the US dollar between end-June and end-December of 2014, showing stability on the foreign-exchange market.
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Business environ shakes foreign investors\\\' confidence : MCCI
FE Report | Published: February 15, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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