The local and foreign investors are yet to get back their confidence which is a major challenge for the economic growth of the country, said the Metropolitan Chambers of Commerce and Industry on Tuesday in its first quarter economic review of the current fiscal year.
The MCCI review published on the day said that in July-September period of 2014-15 fiscal year, the major challenge for economic growth was to restore the confidence of the local businesses and investor community.
The report said that investors also identified underdeveloped infrastructure, shortage of power and energy, lack of proper regulatory framework and political uncertainty as the other major challenges for economic growth of the country.
‘The investors are yet to get back the confidence. The prospective foreign investors have adopted a ‘go-slow’ strategy in making fresh investments since 2013,’ said the report.
In July-August of FY15, net foreign direct investment increased by 10.4 per cent to US$ 244 million from US$ 221 million in the same period of the previous year.
‘According to industry insiders, this investment is not enough for the country’s development. The investors are still to get back the confidence. The prospective foreign investors have adopted a ‘go-slow’ strategy in making fresh investments since 2013,’ said the MCCI.
It said that to achieve government vision to become a middle income country by 2021, it is necessary to maintain political stability in the country.
The trade body said that in the Q1 the agriculture sector performed well while infrastructure deficits and power sector problems were undermining the performance of the manufacturing sector.
‘Without developing new infrastructures and improving existing ones, Bangladesh cannot hope to become a middle income country within the targeted time period,’ it said.
The MCCI said that government should give priority to ongoing development projects including the Dhaka-Chittagong four-lane and Dhaka-Mymensingh highways, double tracking of the Dhaka-Chittagong railway, the Padma Bridge, the Dhaka metro rail and the two Bibiyana gas field based power plants.
The trade body said although the overall export earning made a positive growth in the overall quarter, it still fell short of the target.
According to data, the export earnings stood at US$ 7.695 billion during July-September of FY15 compared to US$ 7.628 billion in the corresponding months of FY14, which also fell short of the strategic target by 3.87 per cent set for the period.
‘Export earnings in September 2014 witnessed a negative growth of 1.43 per cent to US$ 2.553 billion compared to US$ 2.590 billion in September 2013 but the receipts surpassed the strategic target by 8.92 per cent set for the month,’ said the report.
The MCCI said that political violence and labour unrest in the garment sector affected the growth of the industry sector.
‘The broad industrial sector managed to grow by 8.39 per cent but it is 1.25 percentage points short from previous year’s growth,’ it said.
The MCCI said foreign aid inflow declined in July compared with the previous month but the remittance made significant growth.
‘The higher remittance was mainly due to Eid festival,’ it said.
-With New Age input
