Bangladesh shows signs of improvement due to export earnings: MCCI

02 Mar '23

2 min read

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Bangladesh’s economy has been indicating signs of improvement, primarily due to a rise in export earnings, according to the Metropolitan Chamber of Commerce and Industry (MCCI). In its economic review for the fourth quarter (Q4) last year, the chamber said import payments and inward remittances, however, decreased during the quarter, with multiplier effects on other sectors.

The improvement was a result of full-swing operations in the garment, leather, plastic, jute, steel, food-processing and transport sectors, it noted.

"Foreign currency reserve is still somewhat in a satisfactory position but in a weaker trajectory," the trade body said and noted that the exchange rate has long been stable, but depreciated notably in December 2022 in terms of the US dollar.

The country’s robust economic recovery from the pandemic has been badly disrupted by the ongoing Russia-Ukraine war and subsequent supply-chain disruptions, price spikes and a slowdown in external demand, it observed.

Weak remittance inflow, rise in inflation, negative current account balance, depreciation of taka and a decline in foreign exchange reserves also contributed to the disruption, the chamber was quoted as saying by Bangladeshi media reports.

The industrial sector witnessed a decline in growth from 10.29 per cent in fiscal 2020-21 (FY21) to 9.86 per cent in FY22.

"To overcome the pressure, the government took quick and decisive measures to address the economic fallout. It also needs to take more actions to stabilise foreign exchange reserves, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply for economic activities, and extend social safety net programs," the executive summary of the review said.

Fibre2Fashion News Desk (DS)

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