[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Economy on pickup after a downturn

Bangladesh's economy gets on a pickup as an important indicator showed a rise in October after consecutive two months of downturn, with most major sectors performing a bit better. The country's overall Purchasing Managers' Index (PMI) score in October recorded an increase of 3.2 points from

thefinancialexpress.com.bd

Overall October indicator increases
Economy on pickup after a downturn

Bangladesh's economy gets on a pickup as an important indicator showed a rise in October after consecutive two months of downturn, with most major sectors performing a bit better.

The country's overall Purchasing Managers' Index (PMI) score in October recorded an increase of 3.2 points from September to reach 51.8-an indicator that the economy is expanding.

The October PMI reading means the economy is returning onto growth trajectory after two consecutive months of contraction.

Agriculture marked faster expansion while manufacturing, construction and services also returned to expansion.

The agriculture sector recorded its fourteenth consecutive month of expansion, and at a faster rate, increasing by 6.0 points to 61.2.

The indices of new business, business activity and employment continued to expand, while order backlogs reverted to expansion. The input-cost index remained in expansion, too.

The manufacturing sector reverted to expansion at 50.9, increasing by 6.1 points.

Stocks of input purchases, stocks of finished goods and imports reverted to expansion, while employment and supplier deliveries remained in expansion.

New export orders and factory output continued to contract. Input prices recorded strong expansion, whereas order backlogs remained in sharp contraction.

The construction sector turned back to expansion at 51.0, gaining 2.5 points.

Employment returned to expansion after remaining unchanged in September, while order backlogs continued to expand. New business and construction activity remained in contraction, whereas input costs posted strong expansion.

The services sector returned to expansion at 50.3, rising by 1.3 points. Employment returned to expansion, while new business, business activity and order backlogs continued to contract. The input- cost index continued to post strong expansion.

"In terms of the Future Business Index, expansion readings were recorded across all four sectors, indicating positive expectations for business conditions," says the PMI disclosure.

"The October PMI reading marks a small but positive development as it expands after two difficult months, supported particularly by stronger agricultural and export performance."

However, the recovery remains fragile.

"New orders and business activity are still shrinking across manufacturing, construction and services, while input costs remain elevated," says Dr M Masrur Reaz, Chairman and CEO of the Policy Exchange Bangladesh.

This divergence suggests that the return to expansion has yet to translate into a broad-based strengthening of demand.

He also says: "Ensuring reliable energy supplies, easing working-capital constraints and containing further elevation in business costs will be critical to sustaining recovery."

He has further said the positive expectations for future business offer some encouragement, but translating confidence into investment and production requires more predictable operating conditions.

PMI is a monthly economic indicator that measures the health and direction of the private-sector economy.

It is derived from confidential monthly surveys of senior purchasing executives and supply-chain manages managers at private companies.

The PMI runs on a scale of 0 to 100. Above 50 signals expansion at 50 signals no change and below 50 means a contraction or slowdown.

Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and Policy Exchange Bangladesh (PEB) have successfully released it over the past two years.

MCCI and Policy Exchange devised the index with support from UK Government and technical support from Singapore Institute of Purchasing & Materials Management (SIPMM).​

 

[Saif]

Slight decline in inflation offers no relief

The news that inflation eases slightly to 8.27 per cent in October from September's 8.34 per cent could be relishing but for the negative impacts on a large section of the population. Moreover, it still remained higher than the 8.17 per cent in October last year. Actually, the fall in food inflatio

thefinancialexpress.com.bd

Slight decline in inflation offers no relief

The news that inflation eases slightly to 8.27 per cent in October from September's 8.34 per cent could be relishing but for the negative impacts on a large section of the population. Moreover, it still remained higher than the 8.17 per cent in October last year. Actually, the fall in food inflation on a point-to-point basis by 0.82 per cent to 6.40 per cent last month from 7.22 per cent in September, as the Bangladesh Bureau of Statistics (BBS) data show, is the main driver of the overall decline in inflation. Credit certainly goes to the augmented agricultural production. But the problem here is the unrelenting rise in inflation of non-food items. In reality, the gain from relatively cheaper foods has been offset by the soaring prices of non-food essentials. Non-food inflation rose to 9.89 per cent last month from September's 9.30 per cent.

Yet the picture of the food market is not plain and simple. Prices of staples like rice and flour have not come down at all; rather those have gone up from time to time. The growers cannot dictate the term but millers and middlemen do. In reality, farmers are counting losses not only from paddy but also from the early yield of winter vegetables. Right now the supply glut of vegetables like bottle gourds, cauliflowers apart from last year's potato and onion have brought down the prices of the produce to an abnormally low level. There were reports that at the farm level in the country's north four bottle gourds were priced only at Tk 1.0. Quite unthinkable. Farmers are also counting losses on account of the low prices of paddy at the growers' level. But strangely, millers and retailers make profits from sale of rice both in urban and rural markets. There is a difference here between the perishable items and cereals with a far longer shelf life.

Ironically, farmers who grow staples and vegetables are the worst victim of higher non-food inflation. If different kinds of produce they grow have to be disposed of at throw-away prices, they cannot afford pricey non-food essentials. This exactly is happening now, explaining the higher inflation in rural areas compared to urban rates. People engaged in low-skilled occupations along with farmers have found their real wages falling without matching the rising inflation. Almost half the population, whose real wages have fallen, now belongs to this category.

The situation is quirky, only more so because there are social segments which have more than enough money at their disposal irrespective of high or low inflation. It is the low-income segments which have their back to the wall. The ideal solution is to contain inflation at the minimum possible level. There is no doubt that a well-managed supply chain can take care of the anomalous marketing system. Direct transportation of produce from growers' farm to urban markets can make a difference. The middlemen at different points can be eliminated by way of pressing into service a pool of trucks under the supervision of the Bangladesh Road Transport Corporation. Such a system can help avoid losses incurred by growers. On the other hand, business syndicates' monopoly can as well be curbed if market monitoring and supervision of import prices, duties and transportation costs of commodities are maintained regularly.​

 

[Saif]

9 industrial groups join the billion-dollar club

The 2025–26 financial year was not particularly favourable for the country's industrial sector. Energy shortages disrupted factory production, while exports recorded no significant growth. Despite these challenges, nine industrial groups in Bangladesh crossed the one billion dollar threshold...

en.prothomalo.com

9 industrial groups join the billion-dollar club