The Metropolitan Chamber of Commerce and Industry said that the country’s economy has improved in the first quarter of the current fiscal year, with the turnaround in the trade sector and strong growth of domestic demand.
The overall investment scenario, though still depressed, is improving as investments are being made in the power and electricity sector, said the premier trade body.
‘Most of the leading sectors of the economy fared relatively better, even though within each the performance of different sub-sectors was mixed,’ said the chamber in its quarterly economic review.
In July-September 2010, said the chamber, the performance of the fisheries, livestock, construction and electricity sectors improved but the sub-sectors of gas and water lagged behind.
The rise in private sector credit and increased volume of the letters of credit indicate that manufacturing activities have been on the rise, said the review.
‘The performance of the industrial sector could have been much better had there been no shortage of electricity and gas,’ the chamber opined.
The MCCI noted that the Bangladesh Bank, to contain inflationary pressure, remained vigilant and made its monetary policy instruments more effective. Its interventions in the foreign exchange market and monitoring of excess liquidity in the banking sector also kept the economy on an even keel.
The review said that the services sectors, like education, hospital, travel agencies, hotels and restaurants, showed good performance.
The MCCI said that enhanced tax revenue in the July-September quarter can be attributed to the increase of economic activity and broadening of the tax base.
Exports emerged from the negative growth phase and recorded 31 per cent growth in the quarter over the corresponding period as the world’s major economies, Bangladesh’s export market, rose above recession.
Imports also picked up in the quarter with 38 per cent growth over the corresponding period.
The flow of remittances, however, has shrunk due to the lessening of manpower export and the growing number of returnees from overseas jobs.
‘While there are some definite signs of improvement, the actual increase in investment will depend on how effectively the government can ease the constraints to investment growth, including the shortage of power and electricity,’ said the review in conclusion.
