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seminar on “Bi-annual economic state and future outlook of Bangladesh economy: private sector perspective"
Law and order situation must be reinstated and confidence to be restored in order to maintain production and export flow, told Ashraf Ahmed, President, Dhaka Chamber of Commerce & Industry (DCCI) at a seminar on “Bi-annual economic state and future outlook of Bangladesh economy (January-June FY2023-24): private sector perspective” organized by DCCI held on 28 September, 2024. Ashraf Ahmed presented the keynote paper in the seminar.
Regarding the Central Bank’s current strategy of higher interest rates and tighter liquidity management, he suggested that the strategy should be reversed as soon as inflation comes under control. He expected that the balance of payment issues to be resolved soon, with the expectation that export level can be maintained. The trend of devaluation of taka will come down once US dollar rate falls which could help cut the energy prices as well, he added. Energy supply is crucial to maintain the momentum of growing export trend, he said.
DCCI President Ashraf Ahmed underscored the importance of mid-term reforms in various policies, investments and operating procedures of various government bodies for creating a better business environment and investment climate. We are also witnessing few issues with NPL within a small segment of the banking system—reportedly only ten banks are badly affected, indicating that the remaining banks are in acceptable health. We need to ensure systematic stability maintained and both borrowers and depositors will be able to transit to better banks smoothly.
Ashraf Ahmed also pointed out that due to high interest rate, higher exchange rate and increasing cost of capital, the actual effective credit flow to CMSME sector has been on a downward trend. He requested to maintain the flow of loan disbursement in the CMSME sector so that they have enough working capital in hand. He also said that monetary policy should be flexible once the inflation comes down. If the tax revenue collection gets a boost, it will ease public sector loan repayment, he added. To control inflation he suggested for strong domestic supply chain mechanism, minimizing wastages, improvement of age-old market logistic system and implementing modern market mechanism in place. Regarding lower private investment rate, Ashraf Ahmed said that development of confidence will help grow private investment gradually. We have to ensure our industrial production remains uninterrupted so that our export continues to support foreign currency earnings. He later termed electronics & semiconductor sector as one of the most promising area in the export basket after ready-made garment.
Dr. Khan Ahmed Sayeed Murshid, Economist and Former Director General of Bangladesh Institute of Development Studies (BIDS) said that everything happens so fast in this world and we have no alternative but to response quickly. With economic challenges, few non-economic challenges are also very crucial that need to be addressed soon. He underscored the importance of broad-based inclusive growth ensuring fundamental food security, power and energy security, security of education and skill development. To tap the future opportunity, he hinted that AI based technology will have a major impact on global economy. He later emphasized on improvement of public governance and brought notice of the private sector to be ready to adopt the new opportunity.
Dr. Mohammad Abu Eusuf, Professor, Department of Development Studies, University of Dhaka and Executive Director, Research and Policy Integration for Development (RAPID) said containing the macroeconomic stability is now more crucial for the sake of overall economic development. Moreover, we have to have actual realistic data of number of population, GDP size and other statistical components to research the actual scenario of the economy. He termed three ‘R’ as the most important now and those are RMG, Remittance and Rice production. He also underscored the need of products diversification for increased export growth. He further said that if the leather sector of Bangladesh gets adequate support, it can fetch at least USD10 billion a year. He also urged on enhancing tax-GDP ratio, recognizing the NRBs who send remittance giving them extra facilities and enhancing revenue from the direct tax. Later, he urged for better coordination among the monetary policy, fiscal policy and market management.
Dr. Md. Salim Al Mamun, Director (Research), Chief Economist's Unit, Bangladesh Bank said that holistic approach has been taken for the reforms in the financial sector. The growth in the service sector did not see much hike recently but it should be qualitative. Bangladesh Bank has also been trying to modernize concerned policies. To contain inflation, BB has taken few measures like policy rate hike, tightening monetary policy etc. that may bring positive results soon, he added. He also echoed that the main challenge is now to face the challenge of macroeconomic stability.
DCCI’s Senior Vice President Malik Talha Ismail Bari and the directors of the board were also present on the occasion.
Published on: 2024-09-28