Wednesday, November 6, 2024

Economy gradually slowing down

The country’s economy is slowing down gradually and is unlikely to achieve the targeted growth rate in the current fiscal mainly because of the slow pace of investment and political unrest. Sources said most of the economic indicators are going from bad to worse, causing the country’s economic prospects to turn gloomier. The situation will not improve unless the ongoing political unrest ends.
Business activities have virtually come to a standstill because of frequent shutdowns and political violence in the last couple of months. The situation has worsened further as borrowers are not taking their approved loans and banks are sitting idle amid sluggish investment demand.
A lacklustre situation is prevailing in the country’s investment scenario, both in terms of local and foreign direct investment (FDI), mainly because of political uncertainty. Private sector investment as a share of gross domestic product (GDP) fell to a six-year low this fiscal year.
The payment of import bills, however, increased slightly in April after declining for eight months as a result of the contractionary monetary policy undertaken by the central bank and also because of the dismal business environment.
According to experts, these problems, which have affected the country’s macroeconomic stability, will, in
effect, result in moderate economic growth. This will also affect the prospects of investment and employment. Revenue mobilization by the National Board of Revenue (NBR), exports and imports, and the private sector’s output — all are below their targets.
“The analysis of the macroeconomic performance in the current fiscal, based on available data, signals that the growth target of 7.2 per cent is unlikely to be achieved,” said former adviser Dr. Mirza Azizul Islam while talking to The Independent.
Private investment, according to sources, has been a matter of concern in the last four years. In the last fiscal (2011-12), private investment as a share of GDP declined to 19.1 per cent, from 19.7 per cent in 2009. It further declined to 18.99 per cent this fiscal, a six-year low, because of political uncertainty and the global slowdown. “The investment situation in the current fiscal and the outlook in the next fiscal also do not look promising,” said former adviser Dr. Mirza Azizul Islam.
The investment-GDP ratio is already very low in Bangladesh. The fall in private sector investment this year has caused concern among policymakers. In such a situation, experts and economists have expressed apprehensions about the targeted growth rate. Achieving the projected 7.2 per cent GDP growth rate would be very challenging mainly because of slower rates of growth in the industrial and service sectors, internal and external demand, and overall investment, they pointed out.
Dwelling on the country’s overall macroeconomic situation over the last three quarters of the current fiscal, Centre for Policy Dialogue (CPD) senior fellow Dr. Khondaker Golam Moazzem Hossain also observed that the country’s overall economic performance is slowing down gradually, which he dubbed “gradual deceleration”.
Although inflow of FDI has increased in recent days, the country is continuously facing problems in connection with investment. Lack of infrastructural facilities, shortage of power and energy, and a turbulent political environment are discouraging entrepreneurs from investing in the country, said Dr. Moazzem Hossain.
Export-oriented investments have also slowed down substantially as the global recovery is faltering, he added.
The growth rates of domestic credit (13.4 per cent) and private sector credit (14 per cent) are unlikely to meet their annual targets as the private sector has lost its appetite for credit. “Despite some improvement in recent days, decline in the imports of capital equipment and the slow rate of growth of imports of raw materials indicate lower utilisation of existing production capacity and a lull in investment,” said former adviser Dr. Mirza Azizul Islam. Drops in import letters of credit opened for machinery and industrial raw materials signal weak economic activity in the coming months, he added.
Apart from political unrest, investors are of the view that infrastructure development is still weak. Uncertainty about gas and power supply, rise in prices of diesel, furnace oil and other energy products, the high interest rates and higher labour costs, have all made investors jittery.
Many employers are retrenching their staff, especially those operating in the country’s capital market. Bankers are unwilling to take risks. All these have impacted the share market. Import and export-related transactions are being hampered while the supplies of essential commodities are being delayed as a result of work stoppages and political bickering. In such a situation, the suffering of the common people has increased.
The country’s general or point-to-point inflation increased to 7.93 per cent in April from 7.74 per cent in March mainly because of disruptions in supply chains amid political unrest, which pushed up food prices. According to data of the Bangladesh Bureau of Statistics, food inflation increased to 8.68 per cent in April from 7.50 per cent in March, while non-food inflation was slightly down to 7.91 per cent in April from 8.04 per cent in March. This has hit the low-income group people hard.
Revenue collection by the NBR, the most dependable performer among the macroeconomic indicators during this regime, has been found wanting and may witness a shortfall. During the first eight months of the current fiscal, the growth of NBR revenue was about 15.4 per cent as against the target of 18.8 per cent.
Growth of export earnings (10.2 per cent) during the first three quarters of the current fiscal was also well below its annual target in the July-February period (15.3 per cent). Growth in garment exports is declining. It has declined to six per cent from 43 per cent in the last fiscal. Demand for the dollar has come down in the domestic market against the Bangladesh Taka. The exports sector may suffer due to the rise in the value of the Taka. The inflow of remittances may also be affected because of the appreciation of the local currency.

-With The Independent input

Related News

Ijtema scheduled for two phases from January 31 to February 9: home adviser

News Desk : dhakamirror.com Bishwa Ijtema is set to take place in two phases from January 31 to February 9 next year, as announced today by Home Affairs Adviser Lt Gen (retd) Jahangir Alam Chowdhury. The first phase will be held from January 31 to February 2, with the second phase from February 7 to ... Read more

Bangladesh sent 9.3 lakh workers abroad since Jan

BSS With sincere efforts by different stakeholders, especially the government, Bangladesh sent abroad 9.3 lakh workers with jobs from January to 2 November this year. “The trend of overseas employment is satisfactory so far and we are expecting to send more remittance senders with jobs this year,” Director of Bureau of Manpower Employment and Training ... Read more

Policymakers unaware of people’s struggles as they don’t rely on public transport, says Road Safety Foundation

News Desk : dhakamirror.com Those responsible for public transport policymaking in the country do not use public transport in the capital, so they do not understand the sufferings people endure, Road Safety Foundation (RSF) Chairman AI Mahbub Uddin Ahmed said today (2 November). The chairman of the Road Safety Foundation (RSF), AI Mahbub Uddin Ahmed, ... Read more

Job aspirants can now try 4 times for BCS exam

News Desk : dhakamirror.com From now a job seekers will be able to sit for Bangladesh Civil Service (BCS) examinations up to a maximum of four times. This decision was taken at a meeting of the advisory council chaired by chief adviser Dr Mohammad Yunus at his office on Thursday, said a press release from ... Read more

Load-shedding surpasses 1,500MW as Adani reduces generation

News Desk : dhakamirror.com Load shedding exceeded 1,500MW on Friday after yet another power producer, the Adani power limited, cut its production due to non-payment of bills. Grappling with a dollar crisis for more than two years, Bangladesh’s dues to power plants jumped to over Tk 43,000 crore in July. Adani’s outstanding bill stood at ... Read more

DU-affiliated 7-college students block Science Laboratory for 2nd consecutive day

News Desk : dhakamirror.com Students of seven colleges affiliated with Dhaka University (DU) have blocked the Science Lab intersection in the capital on Wednesday for the second consecutive day to press home their demand for a separate autonomous university. They blocked the crossing at about 11:00am halting vehicular movement. Students of the seven colleges — ... Read more

Madrasa student drowns in Cox’s Bazar

News Desk : dhakamirror.com A madrasa student drowned near the beach in Cox’s Bazar around 12:30pm today (26 October). The incident happened at Sugandha Point, confirmed Executive Magistrate of Tourism Division of Cox’s Bazar district administration Md Tanvir Hossain. The deceased has been identified as Mahmudur Rahman, son of Didarul Alam from Banglabazar area under ... Read more

Cyclone Dana turns into land depression

News Desk : dhakamirror.com Cyclone “Dana” over North Odisha and adjoining area moved and weakened North-Northwestwards and now lies over the same area as a land depression. It is likely to move West-Northwestwards further and weaken gradually and will become insignificant, said a Met office bulletin on Saturday, reports UNB. “Light to moderate rain or ... Read more

Maximum entry age for public jobs to be 32

News Desk : dhakamirror.com The government has approved raising the maximum age for applying for public service jobs to 32 years. This decision was made at a meeting of the interim government’s advisory council, said a press release issued by the Cabinet Division today. The current age threshold is 30, and 32 for children of ... Read more

Cyclone Dana heads towards India

News Desk : dhakamirror.com Skies remained overcast all over Bangladesh amidst light to heavy rains accompanied by gusts as the cyclonic storm Dana barreled down the Bay of Bengal towards the Indian coast between Odisha and West Bengal on Wednesday. Forecasters said that Bangladesh has little to worry about as the cyclone was moving away ... Read more

Gold price crosses Tk 1.4 lakh per bhori

News Desk : dhakamirror.com The Bangladesh Jewellers Association (Bajus) today (19 October) increased the price of gold by Tk2,613 per bhori, followed by a price hike in the local bullion market. According to a Bajus statement, 22-carat gold will now cost Tk1,40,061 per bhori (11.664 grams). The new rate will be effective from tomorrow (20 ... Read more

Low pressure likely to form in Bay on Tuesday: BMD

News Desk : dhakamirror.com A low pressure is likely to form over the central Bay of Bengal around Tuesday, Bangladesh Meteorological Department (BMD) said today. In its latest weather bulletin, BMD said rain or thundershowers accompanied by temporary gusty wind is likely to occur at a few places over Khulna, Barishal and Sylhet divisions and ... Read more

Interim govt approves 11-day Eid-ul-Fitr, Eid-ul-Azha holidays, 2-day for Durga Puja

News Desk : dhakamirror.com The interim government today extended the Eid-ul-Fitr holidays to five days, Eid-ul-Azha holidays to six days and Sharadiya Durga Puja holidays to two days for 2025, according to the Chief Adviser’s Office. Currently, there are three-day public holidays for each Eid and one day for Durga Puja. The list of public ... Read more

Two entire families lost to a road accident in Pirojpur

News Desk : dhakamirror.com At least eight people from two families, including four children, died after a private car plunged into a roadside canal in Pirojpur early today. The deceased are Shawon, 32, his wife Amina, 25, their two children Sahadat, 7, and Abdullah, 3, from Bhaijhora village of Pirojpur’s Nazirpur upazila and Motaleb Sheikh, ... Read more

Italian embassy to resolve 20,000 visa applications by December: Foreign adviser

News Desk : dhakamirror.com Foreign Affairs Adviser Md Touhid Hossain on Tuesday said that the Italian Embassy in Dhaka will clear 20,000 visa applications by December as many visa applications had been pending for a long time. “Twenty thousand visa cases have been cleared from Rome. [However] Progress in issuing those visas is very slow. ... Read more

Prof Mobasser Monem appointed as new PSC Chairman

News Desk : dhakamirror.com The government has appointed Dr Mobasser Monem, a Professor of Governance and Public Management at the University of Dhaka, as the new Chairman of the Bangladesh Public Service Commission (BPSC). Along with Professor Monem, four others have been appointed as members of the BPSC. The four members are– Md Suzayet Ullah, ... Read more

Govt urges IOM to evacuate Bangladeshis

News Desk : dhakamirror.com Dhaka has requested the International Organisation for Migration to arrange chartered flights to bring back Bangladeshis willing to leave Lebanon amid airstrikes by Israel on the West Asian country. ‘We have requested the IOM to arrange flights to evacuate Bangladeshis willing to leave Lebanon. But Beirut’s airport is currently unsafe for ... Read more

Flood puts hundreds at risk of starvation

Emran Hossain The ongoing flash flooding puts hundreds of farmer families at immediate risk of starvation in Sherpur district, washing away the rice they stored from the previous harvest and also destroying the standing paddy fields. The divisional office of the Department of Agricultural Extension estimated that the flood affected 97,000 hectares of standing aman ... Read more

Price hikes strain people

Moinul Haque The soaring prices of essential commodities, including rice, vegetables, eggs and broiler chicken, put increasing pressure on the low-income people, pushing them further to the wall. Market analysts have expressed concerns over the unusual spiralling of prices of the essentials, criticising the interim government for its failure to take timely action to protect ... Read more

Four days Durga Puja holiday starting from Thursday

News Desk : dhakamirror.com Bangladesh’s interim government has announced an additional public holiday on Thursday, October 10, for Durga Puja, the largest religious celebration of the Hindu community in Bangladesh, says a press release. During a press conference held on Wednesday at the Dhakeshwari Temple in Dhaka, Mahfuj Alam, special assistant to chief adviser, made ... Read more