The Metropolitan Chamber of Commerce and Industry (MCCI) has said the economy has been gradually recovering despite the political instability after the July-August movement. In its quarterly economic review for July-September 2024 (Q1 of FY25) revealed on Thursday, the MCCI said the country saw improvements in exports, imports, remittances, and foreign exchange reserves despite many economic challenges during July-September. It has identified several pressing economic challenges including high inflation, declining external demand, a revenue shortfall, slow public expenditure, reduced job opportunities, and sluggish investment. The agriculture sector employed about 45% of the labor force and contributed 12.84% to GDP in Q4 of FY24, up from 9.41% in Q3 of FY24. Strong government support and favorable natural conditions, aside from localised flooding, enabled the sector to achieve a growth rate of 5.27% in Q4 of FY24, slightly higher than the 5.16% growth in Q3, said a press release. It said while data for Q1 of FY25 is pending, the industrial sector experienced slower growth of 3.98% in Q4 of FY24, down from 6.25% in Q3. The sector’s GDP share also fell to 35.38% in Q4 from 40.50% in Q3. The manufacturing sub-sector showed a similar trend, with growth declining to 6.45% in Q4 from 6.93% in Q3. The services sector grew by 3.67% in Q4 of FY24, slightly down from 3.81% in Q3. However, its GDP contribution increased to 51.78% in Q4, up from 50.09% in Q3, it added. Adani fraud allegations rock Indian Parliament as opposition demands probe into billionaire's firms Data from the Bangladesh Power Development Board (BPDB) indicates that power generation reached a maximum of 15,717 MW on September 20, 2024. On September 30, actual generation was 13,176 MW against a demand of 13,946 MW, resulting in 340 MW of load shedding. Broad money (M2) growth slowed to 7.88% in September 2024, below the central bank’s target of 8.20%. Private sector credit grew by 9.20% year-on-year, falling short of the 9.80% target. Public sector credit growth plummeted to 8.75%, compared to 26.27% in September 2023. Tax revenue collection decreased by 6.07% year-on-year in Q1 of FY25, with significant shortfalls in VAT and customs revenue. Public expenditure also slowed, with ministries and divisions spending only 4.75% of the annual development program (ADP) allocation during the quarter, compared to 7.50% in the same period last year, it said. Export earnings grew by 7.62% year-on-year to $11.66 billion in Q1 of FY25, while imports rose by 1.64% to $16.17 billion. Remittances surged by 33.34% to $6.54 billion, driven by higher inflows in September 2024. Massive irregularities in banking, energy sectors detected: Debapriya General inflation eased slightly to 9.92% in September 2024 from 10.49% in August. Food inflation dropped to 10.40%, while non-food inflation stood at 9.50%. Rural areas were disproportionately affected by high inflation compared to urban regions. The Bangladeshi Taka depreciated by 1.67% against the US dollar between June and September 2024. Gross foreign exchange reserves stood at $24.86 billion in September, down from $26.91 billion a year earlier. Foreign direct investment (FDI) inflows declined by 15.01% year-on-year to $300 million in Q1 of FY25. While signs of recovery are evident, significant challenges remain for Bangladesh’s economy, said MCCI. It stressed the need for addressing structural inefficiencies and improving governance will be crucial to sustaining growth in the coming quarters.  

To achieve the $80 billion export target of the government for the fiscal year (FY) 2023-24, the export development fund (EDF) should be raised to at least $10 billion and made accessible to all exporters, Metropolitan Chamber of Commerce and Industry (MCCI) President Md Saiful Islam said Monday. As per the Export Policy 2021-2024, the export target is $80 billion for FY24, yet the current EDF is only $7.5 billion, he added. Saiful was addressing the MCCI-Policy Research Institute (PRI) post-budget discussion "Bangladesh from Vulnerability to Resilience and Rapid Inclusive Development" in the capital. Read: Reliable accreditation infrastructure crucial for strengthening export Planning Minister MA Mannan was the chief guest at the event, Dr Shamsul Alam, state minister for planning, and Dr Zaidi Sattar, chairman of PRI, were special guests. "Many areas in the proposed budget for FY23 have a lot of room for improvement as far as the business community's needs are concerned. The allocation of social safety nets is one such area," he noted. There has been an increase in the allocation from Tk107,614 crore in FY22 to Tk113,576 crore considering the twin blows of the Russia-Ukraine war and the pandemic. Read: Govt urged to provide policy support to plastic toy industry for its export-earning potential "Also, natural disasters such as floods, which we are going through right now, will also be another challenge for the country," Saiful said. "So, we are suggesting increasing the social safety net budget from the current level to a reasonable amount." "Also, the personal income tax thresholds have remained unaddressed, which we thought should have been subject to changes, especially the tax-free threshold," the MCCI president said. Read WTO Conference: Bangladesh speaks against sudden ban on food export "Considering the increase in per capita income to $2,824, we believe the personal income tax threshold should be increased to Tk400,000."

Hit hard again, this time by the second wave of the Covid-19 pandemic, Bangladesh's small and medium enterprises (SMEs) are now pinning hopes on the upcoming budget to stay afloat. Not to mention that the survival of these firms is important as they are one of the major employers in the country's economy. Ranging from short-term liquidity and tax cuts to simple compliance for availing loans and extension of debt repayment periods by at least two years, these enterprises seek an array of relief from the government to tide over the economic crisis. These leeways to SMEs, entrepreneurs say, will not only help the sector survive but also ensure the preservation of jobs. Read Speakers urge for simplifying process of stimulus fund disbursement to SMEs Kazi Sazedur Rahman, the president of Paper Cup Manufacturers' Association of Bangladesh (PCMAB), told UNB that though a slew of stimulus packages was announced by the government last year, over 80 percent of the small entrepreneurs in Bangladesh failed to reap the benefits of the same due to corruption in the system. “Though Bangladesh Bank said that over 72 percent of the stimulus packages worth Tk20,000 crore were disbursed as loans until March 31, the reality is different. Some 95 percent of the disbursed loans were availed by corporate houses through sister concerns floated overnight," said Sazedur, also the MD of KPC Industry. According to him, the SME sector has again been hit hard by the second wave of Covid. "The government has so far been very supportive of the sector, but the problem lies at the loan distribution level. Many SMEs are already out of the banking system. If more help is not extended to the sector in the coming fiscal, then many more SMEs will disappear." Also read: Central bank to support SMEs build resilience The small entrepreneurs also seek a substantial cut in the value-added tax on various items in the upcoming budget -- from the existing 15 percent to 5 percent. "Lower taxation will, in turn, benefit the economy as many SMEs don't acquire trade licenses to avoid paying 15% VAT. So, a cut in VAT will benefit both the government as well as the SMEs," Sazedur said. "Moreover, the central bank should immediately impose a moratorium on old loan repayments as it has already extended the deadline till June 30 for banks to disburse stimulus funds among businesses in the cottage, micro, small and medium enterprise (CMSME) sector. Otherwise, many defaulting entrepreneurs won't get the benefit." Read Raise threshold for financial reporting of SMEs: DCCI