The Bangladesh economy has been showing signs of improvement riding mainly on increased export earnings, the Metropolitan Chamber of Commerce and Industry, widely known as MCCI, said in its economic review for the December quarter of 2022.
The improvement came as the export-oriented garment, leather, plastic and jute sectors, along with domestic market-oriented steel, food-processing and transport sectors, have been in full-swing operation, it observed.
The import payments and inward remittances, however, decreased during the December quarter, which had multiplier effects on other economic sectors, it added.
"Foreign currency reserve is still somewhat in a satisfactory position but in a weaker trajectory," the trade body said and noted that the exchange rate has long been stable but depreciated notably in December 2022 in terms of the US dollar.
The MCCI also observed that Bangladesh's robust economic recovery from the Covid-19 pandemic fallouts has badly been disrupted by the ongoing Russia-Ukraine war and subsequent supply-chain disruptions, price spikes, and a slowdown in external demand.
Weak remittance inflow, rise in inflation, negative current account balance, depreciation of taka and a decline in foreign exchange reserves also contributed to the disruption.
"To overcome the pressure, the government took quick and decisive measures to address the economic fallout. It also needs to take more actions to stabilise foreign exchange reserves, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply for economic activities, and extend social safety net programs," the executive summary of the review reads.
The review report, signed by MCCI Secretary General and CEO Farooq Ahmed, further said the agricultural sector achieved a lower growth rate of 3.05% in FY22, down from 3.17% in the previous fiscal, despite favourable natural factors and strong government support.
The industrial sector also saw a decline in growth – from 10.29% in FY21 to 9.86% in FY22 – while the services sector grew by 6.26% compared to 5.73%.