[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Country’s economy in positive trend: BIDA chief

Bangladesh Investment Development Authority executive chairman Chowdhury Ashik Mahmud Bin Harun said that there was a positive trend in the country’s economy in the past six months...

www.newagebd.net

Country’s economy in positive trend: BIDA chief
Staff Correspondent 23 February, 2025, 22:21

Bangladesh Investment Development Authority and Bangladesh Economic Zones Authority executive chairman Chowdhury Ashik Mahmud Bin Harun and National Board of Revenue chairman Abdur Rahman Khan, among others, are present at the launch event of Authorised Economic Operator at the NBR premises in the capital Dhaka on Sunday. | Press release

Bangladesh Investment Development Authority executive chairman Chowdhury Ashik Mahmud Bin Harun said that there was a positive trend in the country’s economy in the past six months.

‘Exports have increased by 13 per cent in the last 6 months, where the container handling also increased by 7 per cent in January. We need to address all the negative factors and move forward,’ he added.

He was speaking as the chief guest at the launching event of the Authorized Economic Operator at the National Board of Revenue on Sunday.

The NBR launched the AEO in aiming to make export-import business easier and risk-free along with providing customs and tariff-related information from a single platform.

BIDA executive chairman also said that if the AEO is fully operational, the pressure will be reduced on both the NBR and the business community. He also said that it should have launched earlier but it took 12 years.

He also said that a new chapter in trade facilitation has begun in Bangladesh with the issuance and implementation of the AEO certificate.

‘Compliant importers and exporters will benefit greatly by reducing lead time and costs through the proper implementation of AEO,’ he added saying that in placing import orders, the buyers first consider its Vietnam operations before allocating the remaining orders to its Bangladesh unit as Vietnam is far ahead in terms of lead time. He also said that the country needs to address these.

The NBR launched the Authorised Economic Operator to facilitate and eliminate risk in export-import business and provide customs and tariff-related information from a single platform.

Businesses and individuals can access essential trade-related details, including general information, compliance requirements, product-specific documentation, tariff rates, duty and tax benefits, an approximate tax calculator and preferential tax benefits, through dedicated websites, according to a NBR presentation.

The NBR also introduced ‘Customs Strategic Plan 2024-28’ and ‘Export-Import Hub’ at the event.

The AEO module is within the Automated System for Customs Data (ASYCUDA) World, which is designed to facilitate faster consignment clearance at ports, the revenue authority said.

NBR chairman Abdur Rahman Khan acknowledged that the revenue authority had lagged behind in automation efforts, as it had failed to implement the AEO system on time.

He said that some businesses tried to comply with the system in all areas, but some evaded it everywhere.

‘This cannot continue and through the AEO, compliant businesses will get special benefits. We want to see them compete to achieve this facility,’ he added.

He also said that the Mongla and Pangaon ports were still less busy and since cargo pressure was low at these two ports, all goods were tested there properly.

However, he said, due to high pressure, several goods are released without proper testing at the Chattogram port.

‘Introduction of the AEO facility will gradually reduce pressure on the Chattogram port as testing will be easier. If the importers get the same facilities at Mongla and Pangaon ports, they will also use those,’ he added.

NBR first secretary (customs) Amimul Ehsan Khan showcased the presentation on AEO and said that the exporters and importers registering companies under the AEO system would receive unique benefits in the expedited clearance of imported goods and customs clearance of exported goods.

AEO-licenced companies will be able to automatically self-assess 20-50 per cent of their product shipments through green lane facilities. They will also be able to use the AEO logo, pre-arrival declaration, less documentary requirements, priority in scanning and physical examination, regular audit, etc.

Moreover, the companies will be able to temporarily clear customs without chemical testing of the products they require. In cases where a bank guarantee is required, they will get the benefit of clearing goods by providing a 75 per cent bank guarantee and 25 per cent commitment.

Nine companies have received AEO certificates till date.

Zaved Akhter, chairman of Unilever Bangladesh Limited, among other businesses, also spoke at the event.​

 

[Saif]

BANGLADESH ECONOMY: Turning demographic challenges into opportunities

SPEAKING at the recent annual conference of the Bangladesh Administrative Service Association, Chief Adviser Dr Muhammad Yunus has emphasised the need to create opportunities for young people, asserting that Bangladesh’s large population is not a burden but a valuable resource...

www.newagebd.net

BANGLADESH ECONOMY: Turning demographic challenges into opportunities
Anis Chowdhury and Khalid Saifullah 24 February, 2025, 00:00

SPEAKING at the recent annual conference of the Bangladesh Administrative Service Association, Chief Adviser Dr Muhammad Yunus has emphasised the need to create opportunities for young people, asserting that Bangladesh’s large population is not a burden but a valuable resource.

A day later, deputy commissioners proposed the introduction of universal military training for youths, aiming to involve them in the country’s defence efforts.

Of course, this is a political decision, and it requires serious examinations of the proposed programme’s budgetary implications.

We have done some preliminary budget estimates. The good news is that we can introduce the programme progressively over 5-8 years, say beginning with 10 per cent of those turning 18 years as a pilot and then gradually covering the entire cohort of 18-20-year-olds who are able to serve.

The context: seismic demographic shift

IN 50 years since independence, Bangladesh’s population more than doubled from around 70 million (7 crore) to around 174 million (17 crore), turning Bangladesh into one of the most densely populated countries in the world. Despite a rapid fall in fertility, Bangladesh’s population will continue to grow largely due to the momentum effect. The UN Population Division projects that Bangladesh’s total population will reach its peak in 2071 with a population of 226 million.

Bangladesh is well into the third phase of demographic transition, having shifted from a high mortality-high fertility regime to a low mortality-low fertility one. As shown in the population pyramid (Figure 1), there is a youth bulge comprising about 28 per cent of the population in the age bracket 15-29.

The UN projects that by 2030, the proportion of youth in the age bracket 15-29 years will decline to around 25 per cent and by 2050 to around 20 per cent. So, this is our demographic moment that comes only once (see Figure 2).

As professor Yunus stressed, the young population is a blessing — a source of strength, energy, and vigour. A country with a large number of young people not only has a large pool of workforce but also a large pool of potential future leaders — often referred to as a ‘demographic dividend’.

However, demographic dividend is not prearranged. It is an opportunity provided by the age structural transition. This window of opportunity opens for a population only once. If missed, it may become a ‘demographic curse’.

A country can “become old before becoming developed,” as we see in the case of Sri Lanka, characterised by a large proportion of elderly population (non-working age) while the nation still struggles with poverty and infrastructure issues. Thus, the country not only has fewer working-age people (i.e., a smaller workforce), but also has to support a large number of people in their older age. Such a demographic situation potentially hinders a country’s economic progress and creates challenges for its social welfare systems.

Thus, an increase in the proportion of young people in a country’s population structure can bring a huge dividend provided this raw power is converted into highly skilled human resources, absorbed in productive employment, and turned into entrepreneurs.

This can be shown by decomposing the neo-classical production function as follows: Y/P = Y/SE x SE/E x E/LF x LF/WP x WP/P, where Y = GDP, P = population, E = employment, SE = skilled employment, LF = labour force, WP = working-age population.

Thus, GDP per capita (Y/P) is the product of: a) productivity gains due to skilled employment (Y/SE), b) proportion of skilled employment (SE/E), c) employment rate (E/LF), d) labour force participation rate (LF/WP) and e) demography, i.e., proportion of working age population (WP/P).

Bangladesh’s demographic dividend may become a mirage. The recent student/youth unrest, which began with a demand for quota reform and ultimately toppled the Hasina regime, is a clear indication of the economy’s inability to absorb these youthful people in productive employment or turn them into entrepreneurs. The official unemployment figure of about 3-4 per cent based on outdated labour force survey methodology does not reflect the reality.

National service: a feasible urgent solution

OUR most critical challenge is preventing the demographic curse and reaping the demographic dividend. Mandatory national service, comprising some basic defence training, IT and general literacy-numeracy, and vocational skills, will not only bring enormous economic benefits but also prepare the country for disaster management, especially due to the climate crisis. It will also act as an effective deterrent against possible threats to our national sovereignty.

Currently, we have around 1.6 crore (15.9 million) youths in the age bracket 20-24, roughly 87 lakh females and 73 lakh males. Of the youth turning 18 years, about 29 lakh are able to serve, excluding child-bearing females (around 25 per cent) and those with various disabilities.

If 10 per cent of the youth turning 18 years are included in the programme in the first year, and Tk 12,000 per month (equivalent to the current minimum wage) is used for each participant, then 5.8 per cent of the total 2024-25 budget proposed by the fallen regime would be required for defence. This is marginally higher than the 5.3 per cent allocated in the proposed 2024-25 budget. This figure rises to 5.9 per cent and 6.2 per cent if training each participant requires Tk15,000 and Tk20,000, respectively.

The above rough and ready estimates assume no change in the existing allocation for other defence expenses. Nor does the exercise consider efficiency gains.

Obviously, budgeting cannot be done in isolation. The first place to find money is reallocation as required by reprioritisation. It should be mentioned here that the fallen regime in its last budget proposed for 2024-25 in June 2024, increased defence budget by 11 per cent over the revised defence budget for 2023–24. Therefore, this has to be examined seriously; the priorities of the ‘new Bangladesh’ cannot be the same as the fallen regimes.

Money can also come from the savings that might result in other sectors, e.g., education, as there will be reduced pressure to expand post-secondary education. If necessary, the costs of such programmes have to be shared through higher taxes for the sake of securing a prosperous future for this country.

Empowering the youth

TRAINING and skill development through mandatory national service is just one element in the supply side of the equation. The pool of available talent needs to be empowered and deployed to yield a demographic dividend. Otherwise, it will be wasted and may even turn into a disruptive force.

Our most critical challenge is preventing the demographic curse. Not only do we have to reap the demographic dividend, but we also have to ensure what is referred to in the literature as the ‘second demographic dividend’. While the ‘first demographic dividend’ due to the rise in the proportion of working-age population is transitory, the ‘second demographic dividend’ can be perpetual.

For this to happen, countries need to invest in skill upgrading, support entrepreneurial initiatives, and create innovative/flexible work environments to allow working even in older age and asset accumulation by workers.

Especially given the advancement in technology, and particularly artificial intelligence, we urgently need to rethink skill development for our youth. Many university degrees may soon become obsolete because the skills they offer are prone to automation.

Ironically, many blue-collar, hands-on jobs are likely to survive because they require mental and motor skills humans have developed over millennia and are really difficult to automate. We consider them low-skill because we take those skills for granted. On the other hand, jobs that require high-level critical thinking will also survive. We need urgent actions to prevent our youth from falling into the ‘middle’.

Act now

PROFESSOR Yunus has rightly understood the key message of youth revolt: the youth should be placed at the heart of strategies, as they are committed to creating a new world that is inclusive, fair, and just. Therefore, it is logical that his government initiates the measures when the aspirations of the revolution are still fresh in the minds.

Anis Chowdhury is an emeritus professor at Western Sydney University in Australia and held senior UN positions in Bangkok and New York in economic & social affairs, and Khalid Saifullah is a statistician with years of experience working in international organisations.​

 

[Saif]

Expatriates send $1.93 billion in remittances in 22 days of February

Bangladeshi expatriates sent $1.93 billion in remittances in the first 22 days of February, according to Bangladesh Bank data. In the past seven months, since July, remittance inflows have exceeded $2 billion per month for six consecutive months. February is also expected to surpass this mark. Du

thefinancialexpress.com.bd

Expatriates send $1.93 billion in remittances in 22 days of February
UNB
Published :
Feb 23, 2025 21:13
Updated :
Feb 23, 2025 21:13

Bangladeshi expatriates sent $1.93 billion in remittances in the first 22 days of February, according to Bangladesh Bank data.

In the past seven months, since July, remittance inflows have exceeded $2 billion per month for six consecutive months. February is also expected to surpass this mark.

During January, expatriates sent $2.19 billion in total remittances.

Of the $1.93 billion received so far in February, $686.98 million came through state-owned banks, $144.38 million through one of the two specialised banks (Krishi Bank), $1,094.29 million through private banks, and approximately $4.29 million through foreign banks.

However, nine banks did not receive any remittances during this period.

These include the state-owned Bangladesh Development Bank (BDBL) and the specialised Rajshahi Krishi Unnayan Bank. Among private banks, Community Bank, ICB Islami Bank, and Padma Bank failed to receive remittances, while in the foreign sector, Habib Bank, National Bank of Pakistan and State Bank of India recorded no inflows.

In December 2024, expatriates sent a record-breaking $2.64 billion in remittances, the highest-ever in Bangladesh's history.​

 

[Saif]

We won’t hesitate to take decisions for benefit of nation: NBR chief

National Board of Revenue (NBR) chairman Md Abdur Rahman Khan on Sunday categorically said his organisation will not hesitate to take any decision for the benefit of the country. “We are moving towards that direction,” he said while holding a pre-budget discussion with the Newspapers O

thefinancialexpress.com.bd

We won’t hesitate to take decisions for benefit of nation: NBR chief
UNB
Published :
Feb 23, 2025 19:32
Updated :
Feb 23, 2025 19:32

National Board of Revenue (NBR) chairman Md Abdur Rahman Khan on Sunday categorically said his organisation will not hesitate to take any decision for the benefit of the country.

“We are moving towards that direction,” he said while holding a pre-budget discussion with the Newspapers Owners’ Association of Bangladesh (NOAB) at the NBR office in Dhaka.

He mentioned that there are three reasons behind the lower tax-GDP ratio in the country. These are: huge number of tax exemptions and their misuse, short tax net for income tax and value-added tax (VAT) and operational inefficiency.

The NBR chief said that due to the tax exemption culture, the NBR gives away the same amount of money that it collects by taxation.

"We do not want to incur tax expenditure freshly,” he said.

Abdur Rahman Khan said that if anyone makes a small profit, then that person will pay a lower tax, which is the main ethos of the tax administration. He also said that due to the lack of automation, the NBR is still doing many of its duties manually.

While placing a budget proposal for the NOAB, its president AK Azad demanded reducing import duty on newsprint to two per cent, imposing VAT at 5 per cent instead of 15 per cent and writing off corporate tax or making it nominal in the newspaper industry, considering it a service industry.

Prothom Alo Editor Matiur Rahman and The Financial Express Editor Shamsul Huq Zahid also spoke.​

 

[Saif]

Forex reserve nears $21b amid high remittance

Bangladesh’s gross foreign exchange reserves, calculated under International Monetary Fund guidelines, neared $21 billion again, driven by strong remittance inflows...

www.newagebd.net

Forex reserve nears $21b amid high remittance
Staff Correspondent 24 February, 2025, 23:09

A file photo shows a man counting dollar notes in the capital Dhaka. | New Age photo

Bangladesh’s gross foreign exchange reserves, calculated under International Monetary Fund guidelines, neared $21 billion again, driven by strong remittance inflows.

According to Bangladesh Bank data, reserves stood at $20.9 billion on February 20 compared with that of 19.96 billion on January 30.

Bankers said that high remittance inflow and export earnings contributed most to the surge in reserve balance.

According to BB data, remittance inflow was $15.96 billion in July-January period in FY25 compared with that of $12.91 billion in the same period in FY24.

Besides, export earnings soared by 11.58 per cent to $28.96 billion in July-January period in FY25 compared with that of $25.96 billion in the same period in FY24.

In addition, according to conventional valuation by the Bangladesh Bank, the foreign exchange reserve increased to $26.1 billion on February 20 from $25.30 billion on January 30.

The reserve level had previously declined from $21.6 billion on January 7 to $20 billion the next day following a $1.67-billion payment to the Asian Clearing Union (ACU) for November–December import bills.

Additionally, the BB repaid $3.3 billion, or nearly 90 per cent, of foreign overdue payments between August 5, 2024, and December 30, 2024, following a political change.

The BB follows the IMF’s Balance of Payments and International Investment Position Manual, 6th edition (BPM6), for calculating gross and net international reserves.

Meanwhile, the Bangladeshi taka has continued to weaken against the US dollar, reaching Tk 122 per dollar due to a dollar shortage and pressure on banks to settle import payments.

The trade deficit stood at $9.76 billion during July–December of FY25, down from $10.87 billion in the same period of FY24.

However, import payments rose by 3.5 per cent year-on-year to $32 billion, reflecting growing demand for dollars.​

 

[Saif]

BANGLADESH ECONOMY: Turning demographic challenges into opportunities

SPEAKING at the recent annual conference of the Bangladesh Administrative Service Association, Chief Adviser Dr Muhammad Yunus has emphasised the need to create opportunities for young people, asserting that Bangladesh’s large population is not a burden but a valuable resource...

www.newagebd.net

BANGLADESH ECONOMY: Turning demographic challenges into opportunities
Anis Chowdhury and Khalid Saifullah 24 February, 2025, 00:00

SPEAKING at the recent annual conference of the Bangladesh Administrative Service Association, Chief Adviser Dr Muhammad Yunus has emphasised the need to create opportunities for young people, asserting that Bangladesh’s large population is not a burden but a valuable resource.

A day later, deputy commissioners proposed the introduction of universal military training for youths, aiming to involve them in the country’s defence efforts.

Of course, this is a political decision, and it requires serious examinations of the proposed programme’s budgetary implications.

We have done some preliminary budget estimates. The good news is that we can introduce the programme progressively over 5-8 years, say beginning with 10 per cent of those turning 18 years as a pilot and then gradually covering the entire cohort of 18-20-year-olds who are able to serve.

The context: seismic demographic shift

IN 50 years since independence, Bangladesh’s population more than doubled from around 70 million (7 crore) to around 174 million (17 crore), turning Bangladesh into one of the most densely populated countries in the world. Despite a rapid fall in fertility, Bangladesh’s population will continue to grow largely due to the momentum effect. The UN Population Division projects that Bangladesh’s total population will reach its peak in 2071 with a population of 226 million.

Bangladesh is well into the third phase of demographic transition, having shifted from a high mortality-high fertility regime to a low mortality-low fertility one. As shown in the population pyramid (Figure 1), there is a youth bulge comprising about 28 per cent of the population in the age bracket 15-29.

The UN projects that by 2030, the proportion of youth in the age bracket 15-29 years will decline to around 25 per cent and by 2050 to around 20 per cent. So, this is our demographic moment that comes only once (see Figure 2).

As professor Yunus stressed, the young population is a blessing — a source of strength, energy, and vigour. A country with a large number of young people not only has a large pool of workforce but also a large pool of potential future leaders — often referred to as a ‘demographic dividend’.

However, demographic dividend is not prearranged. It is an opportunity provided by the age structural transition. This window of opportunity opens for a population only once. If missed, it may become a ‘demographic curse’.

A country can “become old before becoming developed,” as we see in the case of Sri Lanka, characterised by a large proportion of elderly population (non-working age) while the nation still struggles with poverty and infrastructure issues. Thus, the country not only has fewer working-age people (i.e., a smaller workforce), but also has to support a large number of people in their older age. Such a demographic situation potentially hinders a country’s economic progress and creates challenges for its social welfare systems.

Thus, an increase in the proportion of young people in a country’s population structure can bring a huge dividend provided this raw power is converted into highly skilled human resources, absorbed in productive employment, and turned into entrepreneurs.

This can be shown by decomposing the neo-classical production function as follows: Y/P = Y/SE x SE/E x E/LF x LF/WP x WP/P, where Y = GDP, P = population, E = employment, SE = skilled employment, LF = labour force, WP = working-age population.

Thus, GDP per capita (Y/P) is the product of: a) productivity gains due to skilled employment (Y/SE), b) proportion of skilled employment (SE/E), c) employment rate (E/LF), d) labour force participation rate (LF/WP) and e) demography, i.e., proportion of working age population (WP/P).

Bangladesh’s demographic dividend may become a mirage. The recent student/youth unrest, which began with a demand for quota reform and ultimately toppled the Hasina regime, is a clear indication of the economy’s inability to absorb these youthful people in productive employment or turn them into entrepreneurs. The official unemployment figure of about 3-4 per cent based on outdated labour force survey methodology does not reflect the reality.

National service: a feasible urgent solution

OUR most critical challenge is preventing the demographic curse and reaping the demographic dividend. Mandatory national service, comprising some basic defence training, IT and general literacy-numeracy, and vocational skills, will not only bring enormous economic benefits but also prepare the country for disaster management, especially due to the climate crisis. It will also act as an effective deterrent against possible threats to our national sovereignty.

Currently, we have around 1.6 crore (15.9 million) youths in the age bracket 20-24, roughly 87 lakh females and 73 lakh males. Of the youth turning 18 years, about 29 lakh are able to serve, excluding child-bearing females (around 25 per cent) and those with various disabilities.

If 10 per cent of the youth turning 18 years are included in the programme in the first year, and Tk 12,000 per month (equivalent to the current minimum wage) is used for each participant, then 5.8 per cent of the total 2024-25 budget proposed by the fallen regime would be required for defence. This is marginally higher than the 5.3 per cent allocated in the proposed 2024-25 budget. This figure rises to 5.9 per cent and 6.2 per cent if training each participant requires Tk15,000 and Tk20,000, respectively.

The above rough and ready estimates assume no change in the existing allocation for other defence expenses. Nor does the exercise consider efficiency gains.

Obviously, budgeting cannot be done in isolation. The first place to find money is reallocation as required by reprioritisation. It should be mentioned here that the fallen regime in its last budget proposed for 2024-25 in June 2024, increased defence budget by 11 per cent over the revised defence budget for 2023–24. Therefore, this has to be examined seriously; the priorities of the ‘new Bangladesh’ cannot be the same as the fallen regimes.

Money can also come from the savings that might result in other sectors, e.g., education, as there will be reduced pressure to expand post-secondary education. If necessary, the costs of such programmes have to be shared through higher taxes for the sake of securing a prosperous future for this country.

Empowering the youth

TRAINING and skill development through mandatory national service is just one element in the supply side of the equation. The pool of available talent needs to be empowered and deployed to yield a demographic dividend. Otherwise, it will be wasted and may even turn into a disruptive force.

Our most critical challenge is preventing the demographic curse. Not only do we have to reap the demographic dividend, but we also have to ensure what is referred to in the literature as the ‘second demographic dividend’. While the ‘first demographic dividend’ due to the rise in the proportion of working-age population is transitory, the ‘second demographic dividend’ can be perpetual.

For this to happen, countries need to invest in skill upgrading, support entrepreneurial initiatives, and create innovative/flexible work environments to allow working even in older age and asset accumulation by workers.

Especially given the advancement in technology, and particularly artificial intelligence, we urgently need to rethink skill development for our youth. Many university degrees may soon become obsolete because the skills they offer are prone to automation.

Ironically, many blue-collar, hands-on jobs are likely to survive because they require mental and motor skills humans have developed over millennia and are really difficult to automate. We consider them low-skill because we take those skills for granted. On the other hand, jobs that require high-level critical thinking will also survive. We need urgent actions to prevent our youth from falling into the ‘middle’.

Act now

PROFESSOR Yunus has rightly understood the key message of youth revolt: the youth should be placed at the heart of strategies, as they are committed to creating a new world that is inclusive, fair, and just. Therefore, it is logical that his government initiates the measures when the aspirations of the revolution are still fresh in the minds.

Anis Chowdhury is an emeritus professor at Western Sydney University in Australia and held senior UN positions in Bangkok and New York in economic & social affairs, and Khalid Saifullah is a statistician with years of experience working in international organisations.​

 

[Saif]

Economy shows signs of recovery but faces substantial hurdles

Bangladesh’s economy exhibited a gradual recovery in the second quarter of fiscal year 2024-25, but it faces substantial hurdles, including inflationary pressures, a shortfall in revenue collection, slow public spending, diminished job opportunities and a sluggish investment climate.

www.thedailystar.net

Economy shows signs of recovery but faces substantial hurdles

Bangladesh's economy exhibited a gradual recovery in the second quarter of fiscal year 2024-25, but it faces substantial hurdles, including inflationary pressures, a shortfall in revenue collection, slow public spending, diminished job opportunities and a sluggish investment climate.

In addition, there is a need to rebuild public confidence in the banking system, the Metropolitan Chamber of Commerce and Industry (MCCI) said in its quarterly review of Bangladesh's economic situation for the October-December quarter of FY25.

"Restoring law and order is indeed a critical priority to create a stable environment for economic activities," the MCCI said in the review released yesterday.

The leading chamber said key economic indicators such as exports and remittances demonstrated positive trends.

"The economy has been recovering gradually from political instability that began in the first week of July 2024.

"The slide experienced by the foreign exchange reserves was halted, and the exchange rate of Bangladeshi taka against major currencies stabilised, although some volatility in the reserve position continues to persist.

"Improved trade and current account balance, and the overall balance of payments situation, allowed for some de-restriction of import activities," the trade body added.

However, high inflation and slow revenue collection remain major concerns.

Bangladesh has been grappling with over 9 percent inflation since March of 2023. In January, the consumer price index, a measure of changes in the price of a basket of goods and services, stood at 9.94 percent.

Despite improvements in foreign trade and remittances, inflation remains a critical concern, the MCCI said, adding that the country's central bank has maintained a tight monetary policy stance to curb inflation and stabilise the exchange rate.

The chamber projects that inflation, which eased for the second consecutive month in January, may decline to 9.85 percent this month and 9.7 percent in March.

It said the Bangladesh Bank's efforts, along with the positive trends in exports and remittances, are expected to support broader economic recovery in the coming months.

The chamber said Bangladesh's exports rose 12.8 percent year-on-year to $24.54 billion, primarily driven by the ready-made garments sector.

It said buoyancy in exports might continue in the third quarter with shipments gradually rising. Exporters may ship products worth $4.9 billion in March, up from a projected $4.5 billion in February, the chamber added.

Similarly, Bangladeshi migrants working and living abroad are expected to send a good amount of remittance next month ahead of Eid-ul-Fitr, the biggest religious festival for Muslims and a time when the overall economy gets a big boost because of a shopping bonanza to celebrate the festival.

Remittance inflows, which saw a 27.56 percent uptick in the first half of the current fiscal year, are likely to be around $2.5 billion next month. Better remittance inflow has been attributed to improved banking governance and foreign exchange stability, boosting expatriate confidence.

Consequently, Bangladesh's foreign exchange reserves, which have been strained for nearly three years, are expected to go up.

The MCCI said gross forex reserves might cross $26 billion in March.

The chamber said the country's trade deficit narrowed and the pressure on the balance of payments, which shows a country's transactions with the rest of the world, improved in the first half of FY25.

The trade deficit narrowed year-on-year to $9.76 billion in the July-December period of this fiscal year from $10.88 billion.

However, the industry and services sectors showed a mixed performance.

The MCCI said the industrial sector registered lower growth in the first quarter of FY25 compared to the previous quarter as it suffered due to a sharp slowdown in manufacturing growth. The services sector also witnessed weaker growth.

Foreign investment also fell amid economic uncertainties, infrastructure constraints and regulatory inconsistencies.

The MCCI said Bangladesh's economy is gradually overcoming the difficulties brought on by the present political uncertainty and conflicting world scenario.

"Therefore, the performances of the selected economic indicators are mixed."​

 

[Saif]

Economy rebounding: press secretary

Bangladesh’s economy has been rebounding in the last six months on reaching the verge of collapse, Chief Adviser’s Press Secretary Shafiqul Alam said yesterday.

www.thedailystar.net

Economy rebounding: press secretary

Shafiqul Alam

Bangladesh's economy has been rebounding in the last six months on reaching the verge of collapse, Chief Adviser's Press Secretary Shafiqul Alam said yesterday.

"It's just a miracle," he said at a discussion organised by the Development Journalist Forum of Bangladesh (DJFB) at the Planning Commission in Dhaka.

Right before the interim government took over, the economy was in such a fragile state that it could have fallen apart at any moment, Alam said.

"However, in the last six months, we have witnessed remarkable improvements," he said.

Consumer prices have been declining over the past two months and inflation is expected to drop to 7 percent by June, he added.

"The priority now is to restore confidence and stability among the public," he said, reassuring savers that their deposits were safe under the current administration.

"Had the previous government remained in power, no one would have dared to keep even a single taka in the banks," he claimed.

Alam alleged that a significant portion of the nation's wealth was laundered abroad instead of being invested in the country, which could have created jobs.

"Money from Bangladesh was smuggled out to build 'Begum Para' in Canada and buy entire blocks in London," he added.

He accused the previous government of turning the energy sector into a "factory of theft" by allowing large-scale corruption through capacity charge, which is a fee for ensuring the availability of electricity when needed.

"This organised looting was carried out with state support," he said.

Alam also spoke on the Karnaphuli tunnel project in Chattogram, which connects Patenga on the river's west bank to Anwara on the east.

Built at a cost of Tk 10,689 crore, the 3.32-kilometre tunnel was opened to traffic on October 28, 2023.

He said the tunnel was not necessary under present circumstances and the expenditure was "wasteful".

There is barely any economic activity on the other side of the river and the burden of this "wasteful" expenditure has now fallen on all citizens, he said.

"To cover it, our taxes are increasing. We have no option but to bear the burden of this," he stated.

"Perhaps it will take 10 years from now. Look at the situation today—we can't even generate enough revenue to cover the maintenance costs," he said.

He alleged that it was the former land minister who initiated the tunnel project solely for his own interests.

"(the land minister's) residence is in Chattogram's Anwara upazila, which is an underdeveloped area. He pushed for the Karnaphuli tunnel project mainly for his own convenience and ease of travel," Alam alleged.

He said a seven-star hotel was built there at a cost of Tk 450 crore. "Who will stay in that hotel?" he questioned.

"(The land minister) built it for himself. He assumed that he would remain in power until 2041," Alam alleged.

The event was chaired by DJFB President Hamid Uz Zaman and moderated by DJFB General Secretary Abu Hena Muhib.​