The country's private sector investment is facing mounting challenges, with the ratio falling to a decade-low 22.03 per cent of GDP in FY2025, amid political uncertainty, rising lending rates, currency depreciation, and policy inconsistencies, said the business leaders and policy researchers.
To tackle the hurdles, they suggested improving law and order, fast-track structural reforms, restore investor confidence, and revive private investment and capital import.
They also stressed the need for export diversification, energy security and policy adjustments to sustain investment and growth amid rising global and domestic uncertainties.
They made these remarks at a seminar on "Bi-annual Economic State & Future Outlook of Bangladesh Economy- Private Sector Perspective" organised by Dhaka Chamber of Commerce & Industry (DCCI) at the DCCI auditorium on Monday.
Zonayed Abdur Rahim Saki, State Minister for Planning joined the seminar virtually as the chief guest while Dr. Monzur Hossain, Member (Secretary), General Economics Division, Bangladesh Planning Commission, A.H.M. Jahangir, Additional Secretary & Project Director, Support to Sustainable Graduation Project (SSGP) and Dr. Mohammad Akhtar Hossain, Chief Economist, Bangladesh Bank also attended the event as special guests.
DCCI President Taskeen Ahmed made the address of welcome and also presented a keynote paper.
In his keynote presentation, Taskeen Ahmed highlighted various issues including global economic instability due to conflicts in the Middle East, LDC graduation, monetary policy, inflation, private and foreign investment, international trade, agriculture, industry and manufacturing sector, CMSMEs, energy and power, logistics infrastructure and the financial sector.
He also noted that the new tariff policy introduced by the United States may negatively impact both domestic and global trade and investment.
In his speech, Zonayed Abdur Rahim Saki said that the government is working on appropriate policies to implement the financial commitments outlined in the election manifesto of the newly-elected government.
He also mentioned that the government is well aware of the ongoing crisis in the Middle East and is closely monitoring the situation.
They are also outlining necessary measures to address its potential impacts, he added.
Dr. Monzur Hossain said that the new government is working to support initiatives aimed at building a society-free from income inequality.
He said that to achieve the target of transforming Bangladesh into a $1.0 trillion economy by 2030, at first the country needs to restore economic stability.
In this regard, manufacture-based sectors should receive priority and alternative financing mechanisms beyond the banking system should be introduced to ensure financing for SMEs, he added.
A.H.M. Jahangir said, "As a Least Developed Country, Bangladesh has long benefited from duty-free trade privileges. Although the country was scheduled to graduate from LDC status this year, recently an application was submitted to defer the graduation timeline by three years."
He also expressed optimism about receiving a positive response.
Dr. Mohammad Akhtar Hossain said that inflation currently stands around 9.0 per cent, and the recent Middle East crisis could create further economic instability. In such a situation, Bangladesh Bank may need to adopt contractionary monetary policies to control inflation.
He warned that excessive liquidity in the market and lower interest rates could create instability in the economy.
Dr. Zaidi Sattar, Chairman, Policy Research Institute of Bangladesh (PRI), emphasised the need to reduce excessive dependence on tariffs and suggested that protection for domestic industries should be time-bound and rational.
He also stressed the need for comprehensive reform of the tax structure and bringing the entire process under digital systems.
Dr. A K Enamul Haque, Director General, Bangladesh Institute of Development Studies (BIDS), said that agriculture is increasingly becoming commercialized, and since rice cultivation is becoming less profitable, farmers are losing interest, which could reduce rice production in the future.
He also noted weaknesses in supply chain management that need to be addressed. He further mentioned that financing remains the main challenge for CMSMEs and urged banks to play a more proactive role.
Dr. Mohammad Abu Eusuf, Executive Director, RAPID emphasised the need to accept the reality and take necessary corrective initiatives.
He highlighted the importance of restoring business confidence and strengthening the confidence of bank depositors.
To tackle inflation, he emphasised coordinated efforts through fiscal policy, monetary policy and market management.
Faisal Samad, Director, BGMEA & Managing Director of Surma Garments Ltd, warned that the country's market in the United States and the EU remains vulnerable due to the absence of Free Trade Agreements (FTAs) with those regions, and urgent initiatives are needed in this regard.
He also pointed out that high bank lending rates are creating difficulties for entrepreneurs and emphasised proper utilisation of Bangladesh Bank's GTF fund.
Professor Dr. M. Niaz Asadullah laid emphasis on innovative policies to reduce the cost of doing business and ensure their effective implementation.
He also stressed the importance of updating education curricula at all levels and ensuring global recognition of academic qualifications to enhance the skills of the country's human resources.
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