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Bangladesh - January 9, 2024

Economy needs to get momentum by new govt

Nasir Uddin Ahmed: Before the national parliament election in five consecutive years, there are various crises in the economy of Bangladesh. This time too, due to the dollar crisis, business losses due to the strike-blockade program, even foreign investment is low. But economists are hopeful. They say there is relief in the public mind as the polls ended peacefully on January 7, this election will also bring relief to the economy. Already, the remittance flow has increased. Export earnings have so far been able to sustain growth. Apart from this, the fall in foreign exchange reserves has also been prevented.
Bangladesh development research institute BIDS researcher and chairman of Agrani Bank commented that there may be momentum in the economy soon. Zayed Bakht. He told that ordinary investors do not invest before elections. A fair vote has now taken place. As a result, political stability will prevail now. By doing this, businessmen will focus on investment. That is, traders will start investing on their own.
He also said, I think the confidence of the people of the country has come through this election. People believe that the economy will turn around soon as the government has managed to overcome adverse conditions and hold an acceptable election. He said that there were various talks about foreigners before the election, but now it seems that foreigners are happy to see this election. If the people of the country are happy with this government, foreigners will not come to raise their nose. And so far, no adverse comments have come from outside.
Dr. Zayed Bakht said, originally there was an uncertainty about the election, it has passed. He mentioned that till now there has been no disaster in any fundamental sector of the economy. When confidence returns among people, the economy will turn around when the government enacts supportive policies.
He said, controlling inflation is the most important thing at the moment. It was not possible to take some unpopular policy decisions in front of the elections. Now that a fair and acceptable election has taken place, there are many more decisions to be made, such as leaving the dollar rate up to the market for the sake of the economy. Inflation will increase in the short run but inflation will decrease in the long run. Besides, the government will focus on revenue generation after getting the support of the people again. If you take a strong stand against corruption, it will bring positive results.
He said that the government should focus on the economy to implement the election manifesto. Maybe the government will focus on reforming the economy.
Bangladesh Bank Governor Abdur Rauf Talukder said that the economy will turn around after the election. Recently, during an exchange with journalists, he said, this happens every time before the election. We see an uncertainty. After the election, when the new government is installed, you will see that the economy will turn around very quickly.
In this context, the former governor of Bangladesh Bank Atiur Rahman said that a kind of relief has returned to the society due to the good outcome of this election amid many uncertainties. With the kind of obstacles that were created, many feared that if the election was not held in this uncertainty, the economy would be devastated. We have turned around from there. But challenges remain. Because the economy needs to be reformed. And the reforms that have started in the economy should be strengthened. The good news is that we are already in the midst of reforms.
He said, we are already in the process of reforming the International Monetary Fund (IMF). The new government will be able to speed up these reforms. Efforts have already been made to harmonize the monetary policy of Bangladesh Bank, the fiscal policy and the revenue policy of the Ministry of Finance. Various initiatives have been taken by the government to reduce costs. However, there is still confusion about the exchange rate with the dollar. It should be fixed. Inflation should be brought under control. The duty rate should be reduced. Those who have been affected by inflation, should be supported. The coverage of social security should be increased.
Meanwhile, economic data suggests that foreign exchange reserves have started to increase. This reserve, which went down to $19 billion, has now increased to $21 billion. According to the data of the Central Bank, the remittance flow in the recently concluded December month has increased by about 17.06 percent compared to the same period of the previous year.
Meanwhile, the United Nations Department of Economic and Social Affairs has predicted a report entitled ‘State and Prospects of the Global Economy 2024’, the average inflation rate in Bangladesh may drop to 6.8 percent in 2024. However, the GDP growth will be slightly reduced to 5.6 percent. The average price inflation in this country was 9.6 percent in the recent year 2023. In the new year, it will come down to 6.8 percent. In 2025, it will further decrease to 5.5 percent.
Since the start of the Russia-Ukraine war, global inflation has been on the rise. In August 2022, after the price of all types of fuel oil was increased by 50 percent in Bangladesh, inflation increased. Common people have felt the pressure of inflation throughout the year 2023.
Meanwhile, according to the data of EPB, the country’s product exports decreased in the recent month of December. Compared to last year, there has been a negative growth of 1.06 percent in export income in December of this year. With this, the export income of the country has decreased for three consecutive months. However, in the six months of the current financial year i.e. July-December, the export income of ready-made garments has increased by 1.72 percent.
Incidentally, out of 299 parliamentary constituencies held on January 7, 298 private results have been announced. Among them, ruling Awami League won 222 seats, Jatiya Party 11 seats, Bangladesh Workers Party, Jasad and Bangladesh Welfare Party one each and independent candidates won 62 seats.

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