A gradual fall in coronavirus cases has made a majority of businesses hopeful about a quick economic recovery, but the recovery trend has to face some fresh challenges in the wake of recent spikes in prices of essential commodities, decreasing remittance inflows, and sluggish vaccination rollout, observes the Metropolitan Chamber of Commerce and Industry (MCCI).
In its review of Bangladesh's economic situation in the first quarter of FY22 released on Thursday, the trade body mentions that even though Bangladesh, like many other countries, was struggling with the number of infections and a fear of the new Covid-19 wave during the first quarter of the current fiscal year, the economy showed some signs of recovery.
"The stimulus packages gave comfort to business groups, from large farms to petty micro-enterprises, which eventually helped the economy get back some vivacity."
Exports and imports are two important drivers of the economy, and Bangladesh have done well in both the areas amid the pandemic, the MCCI mentions, adding robust export earnings have facilitated economic recovery in recent times.
The reserves of foreign exchanges are in a satisfactory position and the exchange rate has long remained stable, says the MCCI.
The inflation rate also increased in the quarter under review, it adds.
On the other hand, some of the economic indicators appear to be less promising than what was projected earlier, the MCCI quarterly review says, adding the fiscal framework continues to be weak in view of poor achievements, more specifically, both in terms of revenue mobilisation and public expenditure.
Inward remittance inflows have dropped, which has multiplier effects on other economic sectors, even more so small and medium industries.
The unemployment situation and low investment are also challenges. A significant increase in public and private investment is necessary to maintain competitiveness and generate further growth, the MCCI concludes.