Bangladesh鈥檚 economy has been gradually recovering from the recent political instability in the first quarter of the 2024-25 financial year, but, several challenges such as high inflation, reduced export activity, shortfall in revenue collection, diminished job opportunities and sluggish investment climate need to be addressed, said the Metropolitan Chamber of Commerce and Industry, Dhaka.
The political instability, sparked by the anti-discrimination students鈥� movement, which began in the first week of July 2024 led to a change in government and has resulted in an ongoing transition period, it said.
The MCCI in its 鈥楻eview of Economic Situation in Bangladesh July-September 2024鈥� said that one of the most pressing concerns was restoring law and order.
The general inflation rate, although slightly reduced from 10.49 per cent in August to 9.92 per cent in September, remains alarmingly high with prices of many essentials still at an elevated level, it said.
Food inflation slightly decreased to 10.40 per cent in September from 11.36 per cent in August. Meanwhile, non-food inflation marginally dropped to 9.50 per cent from 9.74 per cent.
People in rural areas were the worst hit of price shocks in September, according to the economic review.
It also said that between the June-end of FY24 and September-end of FY25, the taka depreciated by 1.67 per cent against the US dollar.
Foreign exchange reserves also saw a decline. The Bangladesh Bank鈥檚 gross foreign exchange reserves fell to $24.86 billion at the end of September 2024 from $26.91 billion in September 2023.
When adjusted to the balance of payments and international investment position manual, 6th edition, reserves stood at $19.74 billion, down from $21.06 billion a year earlier.
The National Board of Revenue鈥檚 tax revenue collection decreased by 6.07 per cent to Tk聽70,902.90 crore in July-September of FY25 compared with that of Tk聽75,487.70 crore in the same period of FY24. The revenue authority fell short by 26.53 per cent of its strategic target of Tk聽96,499.90 crore.
The annual development programme implementation rate in July-September of FY25 was sluggish at 4.75 per cent, which was also the lowest in at least 15 years.
According to experts, the low implementation rate was due to a number of factors, including political turmoil, cautious spending, project review by the interim government initiated by the previous government, among others, the review observed.
According to the Implementation Monitoring and Evaluation Division data, 56 ministries and divisions spent Tk 13,215 crore or 4.75 per cent of the total ADP of Tk 2,78,289 crore during July-September of FY25.
Data on the industrial sectors鈥� growth for the first quarter of FY25 were not yet available in the review, however, the sector registered a lower growth of 3.98 per cent in Q4 of FY24, compared with that of 6.25 per cent in the previous quarter.
Investment in the private sector remained sluggish. Private sector credit growth registered a lower growth of 9.20 per cent during the period between September 2024 and September 2023, compared with a higher growth of 9.69 per cent during the period between September 2023 and September2022.
The net inflows of foreign direct investment in July-September of FY25 decreased year-on-year by 15.01 per cent to $300 million from $353 million.
The services sector exhibited lower growth of 3.67 per cent in Q4 of FY24, compared with that of 3.81 per cent in the previous quarter.