The ongoing political unrest and programmes like general strikes, shutdowns and blockade by opposition political parties have compounded the problem of manufacturing and services sectors, the Metropolitan Chamber of Commerce and Industry observed.
The trade body in its first quarter economic review of financial year 2013-14 said that the ongoing political conflict must be resolved as it hurts economic activities, hinders growth, and by disrupting the supply chains pushes up inflation.
The MCCI said agriculture sector has remained largely immune from the political unrest but other production-oriented sectors face the problem.
‘A lacklustre situation prevails in the country’s investment scenario, both in local and foreign direct investment, mainly because of political uncertainties accompanied by shortage of power and energy, and scarcity of land,’ it said.
It said the services and manufacturing sectors had long been suffering due to bottlenecks in physical infrastructure and the persistent crisis in power and energy.
The performance of industrial sector was expected to do well in the quarter but because of the present political turmoil the Q1 performance was lower compared to the performance of the same period of the previous year, it said.
It said the performance of the power sector was below the expected level though there was a significant addition to the power generation.
The country still has power shortage of 1,200 MW as the total demand is now about 7,500 MW while the supply is around 6,300 MW, said the MCCI.
The services sector growth in the first quarter of the current fiscal year might have been lower than the recorded 5.73 per cent growth in FY13, said the MCCI, adding that sub-sectors like wholesale and retail trade, transportation, hotels and restaurants reportedly suffered from the continuing political unrest and associated acts of vandalism, arson and terrorism.
The country’s exports witnessed a robust 21.24 per cent rise in Q1 of FY14 compared to that of the corresponding period of the previous fiscal year, it said.
Remittance inflows to the country decreased by 8.1 per cent in July-September 2013 compared to the same period of the previous year.
The review said that the drop in remittance ahead of the October Eid festivities was unusual as the expatriates usually send more money in times of Eid festivals.
‘Major causes of falling remittances could be the decrease in manpower exports in the last six months and the appreciation of Taka in terms of US dollar,’ it explained.
Disbursement of foreign loans and grants declined in the first two months of FY14, compared with the same period of FY13.
The disbursement of gross aid was even lower than the amount of debt servicing (repayment of principal and interest) in that period.
‘As a result, the net receipt of foreign aid stood at negative $ 460 million during July-August, 2013 compared to the positive $ 226 million during the same period of the previous fiscal year,’ said the review.
-With New Age input
