bdnews24.com :
The import of capital machineries has decreased in the first half of the current 2018-19 fiscal year. Loan flow in the private sector also dropped, causing a slump in the investment sector between July and December.
The opening of Letters of Credit or LCs to import capital machineries from abroad fell by 27.58 percent to Tk 2.38 billion so far, down from Tk 3.29 billion at the same time in 2017-18.
But imports of capital machineries for the development of the industrial sector have seen a 35 percent increase from last year.
Expressing his concern over the decline in imports of capital machineries, Shafiul Islam Mohiuddin, the president of Bangladesh Federation of Bangladesh Chambers and Commerce Industries, said that Bangladesh ‘lacks’ an investment-friendly environment.
“Decrease in the import of capital machineries indicates less investment in the country. The banks are not coming forward with investment opportunities. The interest rate at 13 to 14 percent is high. Several initiatives were taken to bring interest rates down
to a single digit without success.” Bangladesh Bank’s monetary policy for the first half of the 2018-19 fiscal year targeted a 16.8 percent credit growth in the private sector but could only manage 13.2 percent growth at the end of December.
Announcing the monetary policy for January to June on Jan 30, Bangladesh Bank Governor Fazle Rabbi cited the ‘anxiety and uncertainty’ of businessmen over the 11th national election for the reduced flow of loans in the private sector.
But the national election is not the ‘main reason’ for the drop in imports of capital machineries or investment, according to FBCCI chief Mohiuddin.
“The political environment in Bangladesh has been quite stable over the past few years. There wasn’t any unrest before the national elections. The Awami League was more or less expected to remain in power.”
“I believe that the lack of an investment-friendly environment has caused the slump in the sector. It has stagnated.”
The gross domestic product or GDP stood at 5 when the Awami League formed government in 2009. It has since increased to 7.86 over the last decade.
But investments have increased only slightly over the last seven years compared to the GDP, according to the Bangladesh Economic Survey 2018.
According to Mohiuddin, problems related to infrastructure have hampered investment in the country despite the numerous government initiatives.
The import of capital machineries has decreased in the first half of the current 2018-19 fiscal year. Loan flow in the private sector also dropped, causing a slump in the investment sector between July and December.
The opening of Letters of Credit or LCs to import capital machineries from abroad fell by 27.58 percent to Tk 2.38 billion so far, down from Tk 3.29 billion at the same time in 2017-18.
But imports of capital machineries for the development of the industrial sector have seen a 35 percent increase from last year.
Expressing his concern over the decline in imports of capital machineries, Shafiul Islam Mohiuddin, the president of Bangladesh Federation of Bangladesh Chambers and Commerce Industries, said that Bangladesh ‘lacks’ an investment-friendly environment.
“Decrease in the import of capital machineries indicates less investment in the country. The banks are not coming forward with investment opportunities. The interest rate at 13 to 14 percent is high. Several initiatives were taken to bring interest rates down
to a single digit without success.” Bangladesh Bank’s monetary policy for the first half of the 2018-19 fiscal year targeted a 16.8 percent credit growth in the private sector but could only manage 13.2 percent growth at the end of December.
Announcing the monetary policy for January to June on Jan 30, Bangladesh Bank Governor Fazle Rabbi cited the ‘anxiety and uncertainty’ of businessmen over the 11th national election for the reduced flow of loans in the private sector.
But the national election is not the ‘main reason’ for the drop in imports of capital machineries or investment, according to FBCCI chief Mohiuddin.
“The political environment in Bangladesh has been quite stable over the past few years. There wasn’t any unrest before the national elections. The Awami League was more or less expected to remain in power.”
“I believe that the lack of an investment-friendly environment has caused the slump in the sector. It has stagnated.”
The gross domestic product or GDP stood at 5 when the Awami League formed government in 2009. It has since increased to 7.86 over the last decade.
But investments have increased only slightly over the last seven years compared to the GDP, according to the Bangladesh Economic Survey 2018.
According to Mohiuddin, problems related to infrastructure have hampered investment in the country despite the numerous government initiatives.
