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Economy facing major challenges, yet Q2 shows signs of improvement

MCCI observes in its quarterly economic review

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Country's economy is facing significant challenges as reflected in the majority of key indicators mainly due to the prevailing global and internal adversities, according to a leading local business chamber.

"As many as six out of nine key economic indicators, prepared by the Bangladesh Bank, signal significant challenges facing the new government, which economists attribute to persisting global and local adversities," the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka has said.

The six 'weaker parameters' are: Foreign exchange reserves, import volume, domestic debt, export receipts, food stock, and CPI inflation.

The elite trade body made the observation in its review of "Economic Situation in Bangladesh for October-December quarter of 2023 (Q2 of FY '24), suggesting steps to stabilise forex reserves, manage inflation, enhance revenue earnings, ensure proper electricity and gas supply, and improve the food supply situation.

"…The government took quick and decisive measures to address the economic fallouts," said the trade body, pointing out that the economy showed signs of improvement in the quarter under review.

Mentioning that exports and imports are two important drivers of the economy, the MCCI said both the areas have done better amid the present situation.

It also pointed out adversities like a slowdown in the external demand, weak remittance inflow, shortfall in revenue collection and slow public expenditure, rise in inflation, depreciation of the Taka, a decline in forex reserves, unemployment situation and low investment in recent months.

The trade body said that the economy is gradually overcoming the difficulty caused by the Russia-Ukraine war.

In an outlook, it said the export earnings this month (March) might reach US$5.89 billion while the import payments are expected to be $4.46 billion in the same month.

The point-to-point inflation is expected to see a slight fall at 9.85 per cent in February and 9.75 per cent in March this year, according to the MCCI.

On the other hand, the country's inward remittances are likely to stand at $2.22 billion this month (March), it predicted.

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