‘Political unrest to hit export, remittance’
Country’s business community prefers political stability and sound business environment to financial incentives in order to bring momentum in the economic activities, said the Metropolitan Chamber of Commerce and Industry on Saturday. The chamber in the economic review for Q2 of the financial year 2014-15 said restoring confidence among the businesspeople, boosting private sector investment and bringing momentum in the economic activities were the major challenges in the present situation.
The MCCI said because of the ongoing political unrest the export earnings and remittance might face difficulties that could affect the overall economy.
‘In order to achieve the government’s growth and inflation targets, and the medium-term goal of achieving a middle-income country status, the political stability should be maintained,’ it said.
Considering the impact of political instability on economic activity, the government may decide to revise down its existing growth target of 7.3 per cent for the current fiscal year, it said.
‘The donor agencies — IMF, World Bank and ADB — also forecast that the economy would grow between 6.2 per cent and 6.4 per cent in the FY15,’ it said.
The MCCI said the export earnings fell short of the strategic target by 4.42 per cent of $15.604 billion in H1 of the FY15 due to sluggish performance of the readymade garment sector, ‘It is apprehended that the current nonstop blockades and hartals that began from January 5 this year would take further toll on export in coming months hampering overall economic growth.’
It said the apparel exports of the country to the US market had been gradually declining over the last one year as buyers cut back their orders on concerns of political instability, withdrawal of GSP facilities, and safety and other compliance issues.
The remittance inflows in the quarter under review declined by 1.20 per cent to $3.460 billion compared with that of $3.502 billion in the same period of the previous year.
‘The political unrest has recently come back strongly which would have an adverse impact on inward remittances. The expatriate Bangladeshis usually feel discouraged to send the remittance in the country during the period of unstable political situation as they become worried about the security of their hard-earned money,’ said the chamber.
It said the foreign investors were yet to get back their confidence despite the government reduced import duty on machinery and spares and accelerated depreciation on cost of machinery and new industries.
The crop farming performed reasonably well in the quarter under review as the political situation was relatively calm in that time, it said adding that if the government could ensure timely availability of agricultural inputs to farmers, the target set for food grains production should not be difficult to achieve.
-With New Age input
