MCCI's Jan-Mar Quarter Review: Economic recovery still fragile, concerns not over
The country’s economy is still undergoing a fragile and uneven recovery, the apex business body of the Metropolitan Chamber of Commerce and Industry (MCCI) has said.
According to the organization, uncertainty over the economy has not yet subsided due to high inflation, low growth, stagnation in private investment and pressure on the external sector.
The MCCI’s January-March quarterly review report released on Tuesday said that the country’s economy was in a downward growth phase in the third quarter of the current fiscal year.
Due to tight monetary policy, high interest rates and weak domestic demand, the business, trade and industrial sectors did not regain the expected momentum.
The report mentioned that although the instability caused by the political changes in late 2024 has subsided somewhat, its impact on the economy still remains.
The purchasing power of the common man has decreased due to the increase in the cost of living. At the same time, overall economic activity is also limited due to the slowdown in industrial production and private investment.
MCCI said that the tight monetary policy of Bangladesh Bank to control inflation has reduced credit flow. This is having a negative impact on business expansion, new investments and production activities. Small and medium entrepreneurs in particular are facing more pressure.
The report also expressed concern about the global situation. The ongoing conflict and geopolitical tensions in the Middle East have made the international energy market unstable.
As a result, import costs have increased, as well as creating uncertainty in the global trade and shipping system.
The organization believes that this is creating additional pressure on Bangladesh’s foreign exchange situation and inflation.
However, some positive aspects are also highlighted in the report. Strong remittance flows are helping to keep the country’s foreign exchange reserves stable. Although the trade deficit has increased, expatriate income is still playing a role in managing major pressure on the external sector.
According to MCCI, although some macroeconomic indicators are showing signs of gradual improvement, the recovery is still fragile. The economy is operating amidst both domestic and global risks.
Therefore, the organization emphasized controlling inflation, increasing investment, and ensuring a business-friendly environment for a sustainable recovery.
