The country’s economy is facing various challenges, including inflationary pressure, which may weaken the ongoing recovery. The possibility of an increase in default loans, higher cost of doing business, lack of export diversification and skill shortages will be major impediments toward ensuring inclusive growth of the economy. Businesses are still facing hardship despite the rebounding of export earnings and revenue mobilisation by the government. Prices of various essential commodities soared, resulting from higher prices in the international market, and import tariffs and taxes imposed by the revenue authorities. Prices will escalate in the upcoming Ramzan month if the authorities concerned do not take the measures required.
The global commodity market now faces volatility due to supply chain disruption. Inflation in Bangladesh fell to 5.86 per cent in January, the first decline in six months, in contrast to 6.05 per cent the month before. Food inflation rose to 5.6 per cent last month, an increase of 14 basis points from 5.46 per cent a month ago. However, Bangladesh Bank said the economy has fallen into challenges due to the pandemic, but it is performing relatively well owing to the resilience of the private sector. Light engineering, jute, leather, information and communication technology and pharmaceutical sectors are doing better alongside the RMG sector. There is a need to nurture them for better export diversification. Banks, which are not preserving extra provisions compared to their existing requirement, will feel the pinch from the increase in non-performing loans.
There are 78 lakh cottage, micro, small and medium entrepreneurs in Bangladesh, which constitute over 97 per cent of the total industrial units. For this sector, collateral-free, cash flow-based loans are needed. The government urgently pulls the unbridle horse of price soaring by subsidising fuel price, edible oil and essential commodities. All the industrial investment should focus on job creation for unemployed youths, ensuring business environment and social development.
