Bangladesh Bank Governor Fazle Kabir today said that due to the Covid-19 pandemic, the country's economy fell into a challenge, but with the power of resilient private sector of Bangladesh, the economy is performing relatively well.
"Our GDP and total size of economy have been increased which is a good sign and reflects that we are on board," he said.
Kabir said this at a webinar on "Bi-annual Economic State and Future outlook of Bangladesh Economy: Private Sector Perspective" as the chief guest
FBCCI President Md Jashim Uddin joined as special guest while DCCI President Rizwan Rahman presented the keynote paper, said a press release.
Regarding financial sector, the central bank Governor said that the government has declared stimulus package at the right time and there is no liquidity shortages in banks right at this moment.
He also informed that Bangladesh Bank is closely monitoring the inflationary pressure on the economy. In terms of export diversification, Kabir also reiterated that the light engineering, jute, leather, ICT and pharmaceutical sectors are doing better beside the RMG sector.
"We need to nurture these sectors for better diversification. Considering the export competitiveness, the EDF facility has been extended." He added.
He also hoped that the stable economy would help attract more FDI.
Moreover few of the mega projects will be accomplished soon and that will help expedite FDI inflow, Kabir mentioned.
Later, he stressed the need for enhancing soft and hard skills development of manpower considering the challenge of LDC up-gradation.
FBCCI President Md Jashim Uddin said that prices of commodities in the international market have increased.
In that case, cost of import and duty also has increased. But, the economy is yet to be recovered, he said.
He said due to disrupted global supply chain system, the international market becomes a little bit volatile.
For controlling inflation, Jashim recommended to redesign duty structure for the time being. He also urged for sectoral skill development and innovation targeting the LDC graduation.
"Moreover, we need to be competitive on negotiation skills," he added. He termed agro based sector as a potential sector and suggested to incentivize the producers.
For export diversification, value added jute products can be a mainstream product beside the RMG in the long run, he said.
He also said that energy price hike will affect the inflation at this moment as the country is still in the pandemic situation.
The FBCCI President also said that CMSMEs are the lifeline of economy and NPL by CMSMEs are relatively low than the large and medium.
He said the next budget should get priority on private sector, issues related to LDC graduation, revenue collection, ADP expenditure, increasing tax net.
DCCI President Rizwan Rahman said the world is still struggling with the Covid-19, but having these challenges, Bangladesh's economic progress is quite satisfactory during the first half of FY2021-22 despite there are many challenges like inflation, lack of export diversification, policy support, skill shortages, poor logistic infrastructure, supply chain constraints.
Rizwan in his presentation outlined the bi-annual economic state of the country started from July 2021 up to December of the same year.
He said the country still could not come out of the shackle of Covid- 19. Inflation rate rose to 6.05 percent in December in view of the rise in fuel cost in the international market.
He suggested to give loan facilities to the importers of daily essentials and to cut duty on commodities import to tackle the inflation. He also suggested to compensate the agro-businesses with lower transportation and fuel cost.
In terms of revenue growth and effective development expenditure, the DCCI President suggested for full automation of tax, VAT, customs assessment, return and credit.
He also urged for widening the tax net. He said continuation of SUKUK bond and other securitized assets in the local market and sovereign bonds for international borrowing would reduce dependence on banking sector led borrowing.
Rizwan also underscored the need for developing an inclusive and long-term logistic strategy including a National Logistic Policy.
Naser Ezaz Bijoy, President, FICCI, Md Saiful Islam, President, MCCI, Dr Zaidi Sattar, Chairman, PRI, also spoke at the webinar.
DCCI Senior Vice President Arman Haque gave the introductory remarks.