The Metropolitan Chamber of Commerce and Industry on Wednesday said that there were significant downside risks, including power and gas shortage, insufficiency of investment and weak infrastructure that posed threats to the country’s economic growth despite creditable achievements in last fiscal year 2018-2019.
The leading trade body in its quarterly review of economic situation in Bangladesh for April-June period made the observation with an urge to carefully address the risks as it might disrupt industrial production and also discourage new investment.
Bangladesh’s estimated GDP growth at 8.13 per cent in last fiscal year is immense compared with the GDP growth of many other developing countries, it said.
‘However, despite the creditable performance of the economy in certain areas, overall achievements remain below their true potential,’ said the MCCI report.
Inadequate infrastructure, lack of investor confidence in the economy that discourages fresh investment, and shortage of power and energy, are now major impediments to the growth, it commented.
Weak implementation and ambiguity of regulatory and policy frameworks, among others, are another obstacles to the economy, it added.
These impediments must be removed to restore the confidence of the foreign investors as well as the country’s own business and investor community, the report stated.
Though power supply situation improved in the quarter, the production capacity compared to the total installed capacity remained low because of gas shortage while transmission capacity appears to be a limiting factor in the supply of power to the consumers, MCCI observed.
Private sector credit registered 11.29 per cent in last fiscal year against that of 16.94 per cent in the previous fiscal year 2017-2018. Private sector credit growth was also below Bangladesh Bank’s target of 16.5 per cent set in the monetary policy for the second half of FY19.
The capital market witnessed a declining trend for most of the time in the year.
The overall economic situation is positive as indicated by steady improvements in the major economic indicators.
Steady progress in the agriculture sector, moderately good growth in industry despite the crisis in the power sector, the decline in the inflation rate, macroeconomic stability, the build-up of a comfortable foreign exchange reserve, and good progress in achieving the SDGs boost people’s confidence in the country’s ability to attain accelerated economic growth, according to the report.
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