Publish: 14:49, 23 Dec, 2024

Analysts Say

Bangladesh must boost investment to avoid economic crisis

Online Desk
Bangladesh must boost investment to avoid economic crisis
Symbolic

The country risks plunging into an economic crisis in the coming days if the government fails to accelerate public and private investments within the shortest possible time, analysts have warned, reports UNB.

According to Planning Adviser Dr Wahiduddin Mahmud, private investment remains stagnant in the country.

“At present the stagnant situation of private investment is going on, this is due to instability and political insecurity and indiscipline,” he said recently during a briefing on ECNEC meeting.

According to sources in the Planning and Finance Ministry, the country is now facing challenging times in sustaining production in the private sector.

Already RMG and other factories in the private sector have faced serious instability and disruption of production due to various types of movement including labour movement.

“There is no interest at all (from the private investors) in investment in the private sector,” the planning adviser had told the briefing.

Meanwhile, the accelerating interest rate on bank lending caused another trouble for the economy as this acceleration put barriers for the private investors to take loans from the banks.

“As a result, the investors are not showing interest in going for new investments,” Wahiduddin said.

Bangladesh Bank on October 22 hiked the policy or repo rate further by 50 basis points to 10 percent in its efforts to rein in inflation, which has been stubbornly high for the last two years. Banks borrow from the central bank at the repo rate. The latest hike comes in less than a month after the BB increased the repo rate to 9.50 percent from the previous 9 percent.

The general point-to-point inflation rate in Bangladesh rose in November reaching 11.38 percent, up from 10.87 percent in October 2024. This rate is the highest in the last four months.

According to the latest data from the Bangladesh Bureau of Statistics (BBS), the increase was driven by a rise in food inflation, which jumped to 13.80 percent from 12.66 percent.

Meanwhile, non-food inflation showed a slight rise of 9.39 percent from 9.34 percent in November.

The general point-to-point inflation rate both in urban and rural areas also increased last month.

The point-to-point inflation in rural areas in November was 11.53 percent which was 11.26 percent in October. The food inflation in the rural areas was 13.41 percent in November from 12.75 percent in October while the non-food item was 9.72 percent in November from 9.72 percent in October.

On the other hand, the point-to-point inflation rate in urban areas in November was 11.37 percent which was 10.44 percent in October. The food inflation in November was 14.63 percent which was 12.53 percent in October while the non-food item in November was 9.31 percent which was 9.06 in October.  

The wage rate index in November was 8.10 percent which was 8.07 percent in October 2024.

On the other hand, the review meeting of the Bangladesh Bank (BB) monetary policy committee (MPC) has decided not to increase the policy interest rate for the time being.

The committee acknowledged that although inflation remains elevated, the monetary policy stance is on the right track and there is no immediate need to raise the policy rate further.

The MPC assessed the current macroeconomic situation, challenges, and outlook from domestic and global perspectives.

Moreover, the MPC focused on reviewing the current inflation trend and outlook, economic activities and growth prospects, recent financial market developments, and developments in the external sector.

Specifically, the MPC extensively reviewed the overall banking sector's liquidity situation, particularly the cash flow shortage of some conventional as well as Islamic banks, interest rate trends, the foreign exchange reserve position, and exchange rate developments.

The committee anticipates that inflation will likely decrease due to the downward trend in the global price outlook, moderation in geopolitical tensions, the stability in our exchange rate, the expected good harvest of Aman paddy, and the increasing supply of winter season vegetables.

Meanwhile, Bangladesh Bank (BB) has fixed the maximum interest rate on credit cards at 25 percent from 20 percent after banks insisted the central bank raise the rate to recover operation costs.

According to the BB, banks will be able to charge a maximum interest of 25 percent from credit card customers. So far, the maximum interest limit was 20 percent.

The planning ministry officials apprehended that as the private investment is remaining stalled and public investment is experiencing lowest ever, the economy of the country might go through a tough time in the coming days,

“If the public expenditure does not improve also then there would be an economic recession in the country,” the planning adviser had said in the briefing.

During the first four months of the current fiscal year, from July to October, the ADP implementation rate stood at only around 8%, the lowest figure in recent years, according to the Implementation Monitoring and Evaluation Division (IMED) of the Planning Ministry.

Its data highlights that, in contrast, the same period last year saw an execution rate of 11.54%.

 Specifically, for the period from July to October of the current fiscal year, the government managed to implement development projects worth Tk 21,978 crore, according to the IMED.

Finance Ministry sources said that as the stagnant situation is on and the inflation is increasing, employment generation will suffer whether the economy does not see any expansion in the coming days.

They mentioned that middle income group and lower middle income group are experiencing the worst of this inflation.

The planning commission officials hoped that while stability will come in the economy, the private investors will step forward with their investments.

Bd-Pratidin English/ Afsar Munna

More News
Bangladesh's forex reserves reach $20bn
Bangladesh's forex reserves reach $20bn
Honda and Nissan announce merger talks
Honda and Nissan announce merger talks
UK economy stagnant in third quarter in fresh setback
UK economy stagnant in third quarter in fresh setback
DSEX drops by 5.56 points; prices of 130 companies falls on early Monday
DSEX drops by 5.56 points; prices of 130 companies falls on early Monday
EWU achieves US’s ACBSP accreditation
EWU achieves US’s ACBSP accreditation
Asia shares rally on US inflation relief
Asia shares rally on US inflation relief
Dubai eases holiday travel with smart customs app, extra measures
Dubai eases holiday travel with smart customs app, extra measures
Stellantis reverses Ohio layoffs after CEO's resignation
Stellantis reverses Ohio layoffs after CEO's resignation
Qatar vows to halt EU gas sales over due diligence law
Qatar vows to halt EU gas sales over due diligence law
Disruption in industrial sector due to gas crisis
Disruption in industrial sector due to gas crisis
Japanese anime industry sales top 3 trillion yen for 1st time
Japanese anime industry sales top 3 trillion yen for 1st time
‘Market players and regulators responsible for stock market instability’
‘Market players and regulators responsible for stock market instability’
Latest News
5 bodies recovered from cargo ship in Meghna
5 bodies recovered from cargo ship in Meghna
52 minutes ago | City
Bangladesh to kick off Champions Trophy campaign against India
Bangladesh to kick off Champions Trophy campaign against India
59 minutes ago | Sports
UN urges ceasefire as Israel intensifies Gaza attacks
UN urges ceasefire as Israel intensifies Gaza attacks
1 hour ago | International
Chinese dam ignited rare Tibetan protests, ended in beatings and arrests: Report
Chinese dam ignited rare Tibetan protests, ended in beatings and arrests: Report
1 hour ago | International
Travel ban imposed on Shahriar Alam, family members
Travel ban imposed on Shahriar Alam, family members
1 hour ago | National
Bangladesh's forex reserves reach $20bn
Bangladesh's forex reserves reach $20bn
1 hour ago | Business
Bangabandhu Sheikh Mujib Safari Park project cancelled
Bangabandhu Sheikh Mujib Safari Park project cancelled
1 hour ago | National
EVMs won’t be allowed in next polls: Badiul Alam Majumdar
EVMs won’t be allowed in next polls: Badiul Alam Majumdar
1 hour ago | National
Dhaka seeking Hasina’s extradition, sends letter to Delhi: confirms Foreign Adviser
Dhaka seeking Hasina’s extradition, sends letter to Delhi: confirms Foreign Adviser
2 hours ago | National
Court imposes travel ban on Sayeed Khokon, his family
Court imposes travel ban on Sayeed Khokon, his family
2 hours ago | National
Honda and Nissan announce merger talks
Honda and Nissan announce merger talks
2 hours ago | Business
Gaza situation ‘nothing short of an apocalyptic nightmare’
Gaza situation ‘nothing short of an apocalyptic nightmare’
2 hours ago | International
‘Israeli terrorists’ incapable of confronting Yemen: Ansarullah
‘Israeli terrorists’ incapable of confronting Yemen: Ansarullah
2 hours ago | International
ACC lunches probe into alleged Rooppur nuke project graft
ACC lunches probe into alleged Rooppur nuke project graft
2 hours ago | National
UK economy stagnant in third quarter in fresh setback
UK economy stagnant in third quarter in fresh setback
3 hours ago | Business
Amazon and Starbucks workers on strike, Trump's connection suspected
Amazon and Starbucks workers on strike, Trump's connection suspected
3 hours ago | International
Kohli labelled ‘bully’ over argument with female reporter
Kohli labelled ‘bully’ over argument with female reporter
3 hours ago | Sports
South Korean team develops 'Iron Man' robot that helps paraplegics walk
South Korean team develops 'Iron Man' robot that helps paraplegics walk
3 hours ago | Tech
Bangladesh must boost investment to avoid economic crisis
Bangladesh must boost investment to avoid economic crisis
3 hours ago | Business
‘Squid Game’ season 2: Lee Jong-jae returns
‘Squid Game’ season 2: Lee Jong-jae returns
3 hours ago | Entertainment
‘Looting Bride’ collects 1.25 crore by targeting rich men
‘Looting Bride’ collects 1.25 crore by targeting rich men
3 hours ago | International
10 members of a family die in Brazil plane crash
10 members of a family die in Brazil plane crash
4 hours ago | International
Tens of thousands displaced by ethnic brutality in northeast India suffer squalid conditions in camps
Tens of thousands displaced by ethnic brutality in northeast India suffer squalid conditions in camps
4 hours ago | International
Maj Gen Fazlur Rahman to lead commission to re-investigate BDR carnage
Maj Gen Fazlur Rahman to lead commission to re-investigate BDR carnage
4 hours ago | National
Study stresses link between sleep and dementia
Study stresses link between sleep and dementia
4 hours ago | Lifestyle
Libya keen to recruit more Bangladeshi professionals, skilled workers
Libya keen to recruit more Bangladeshi professionals, skilled workers
4 hours ago | National
Attacks on Kamal Adwan Hospital ‘crime against humanity’: Hamas
Attacks on Kamal Adwan Hospital ‘crime against humanity’: Hamas
4 hours ago | International
Delaying election may confuse people: Rizvi
Delaying election may confuse people: Rizvi
4 hours ago | National
'​​​​​​​Letter sent to foreign ministry to bring Hasina back'
'​​​​​​​Letter sent to foreign ministry to bring Hasina back'
4 hours ago | National
80% of Americans believe government is hiding truth about drones, poll finds
80% of Americans believe government is hiding truth about drones, poll finds
4 hours ago | International
Most Read
Assad's wife files for divorce, seeks to move to UK
Assad's wife files for divorce, seeks to move to UK
9 hours ago | International
Great disasters of 1/11, eclipse of 2/11
Great disasters of 1/11, eclipse of 2/11
7 hours ago | Special
Maj Gen Fazlur Rahman to lead commission to re-investigate BDR carnage
Maj Gen Fazlur Rahman to lead commission to re-investigate BDR carnage
4 hours ago | National
‘EC will decide who are eligible for contest in polls’
‘EC will decide who are eligible for contest in polls’
22 hours ago | National
Stellantis reverses Ohio layoffs after CEO's resignation
Stellantis reverses Ohio layoffs after CEO's resignation
21 hours ago | Business
Ctg port faces growing backlog of unclaimed containers
Ctg port faces growing backlog of unclaimed containers
7 hours ago | Special
Tulip Siddiq interviewed over corruption investigation
Tulip Siddiq interviewed over corruption investigation
7 hours ago | International
Trump vows to ‘stop transgender lunacy’ as a top priority
Trump vows to ‘stop transgender lunacy’ as a top priority
8 hours ago | International
Bangladesh receives $900m World Bank financing
Bangladesh receives $900m World Bank financing
22 hours ago | National
'​​​​​​​Letter sent to foreign ministry to bring Hasina back'
'​​​​​​​Letter sent to foreign ministry to bring Hasina back'
4 hours ago | National
Rumor Scanner debunks news regarding sanctions on army, Hasina's return
Rumor Scanner debunks news regarding sanctions on army, Hasina's return
9 hours ago | National
BMD predicts dry weather over country
BMD predicts dry weather over country
5 hours ago | National
40 receive certificates after completing training at Bashundhara Language and Skill Center
40 receive certificates after completing training at Bashundhara Language and Skill Center
22 hours ago | City
Mobile surveillance tech used in enforced disappearances under past regime
Mobile surveillance tech used in enforced disappearances under past regime
21 hours ago | National
Syrian Women's Affairs Chief: Women to play key role in rebuilding
Syrian Women's Affairs Chief: Women to play key role in rebuilding
6 hours ago | International
Dhaka Regency ready to welcome guests to magical Christmas celebration
Dhaka Regency ready to welcome guests to magical Christmas celebration
22 hours ago | Corporate Corner
Dhaka's air quality 2nd worst globally
Dhaka's air quality 2nd worst globally
9 hours ago | City
Widespread scattering of weapons, bullets
Widespread scattering of weapons, bullets
5 hours ago | Special
Sarjis Alam warns of strike by Citizen's Committee in solidarity with doctors
Sarjis Alam warns of strike by Citizen's Committee in solidarity with doctors
21 hours ago | National
Government won’t change its decision on Rohingya entry, says Home Advisor Jahangir Alam
Government won’t change its decision on Rohingya entry, says Home Advisor Jahangir Alam
4 hours ago | National
Ferry services resume after hours of suspension due to fog
Ferry services resume after hours of suspension due to fog
8 hours ago | National
‘Joint drives will be strengthened against hill cutting, air pollution, and banned polythene’
‘Joint drives will be strengthened against hill cutting, air pollution, and banned polythene’
23 hours ago | National
1 killed, several injured in another Dhaka-Mawa Expressway crash
1 killed, several injured in another Dhaka-Mawa Expressway crash
8 hours ago | National
Bangladesh receives $200cr remittance in 21 days of Dec
Bangladesh receives $200cr remittance in 21 days of Dec
22 hours ago | National
67 died in Nigeria after deadly stampedes
67 died in Nigeria after deadly stampedes
8 hours ago | International
Dengue claims two more lives in 24 hrs
Dengue claims two more lives in 24 hrs
21 hours ago | National
Many people appear unhappy when we talk about holding polls: Mirza Fakhrul
Many people appear unhappy when we talk about holding polls: Mirza Fakhrul
10 hours ago | National
Tomatoes thrown, protest outside Allu Arjun's home over stampede death
Tomatoes thrown, protest outside Allu Arjun's home over stampede death
9 hours ago | Entertainment
Asia shares rally on US inflation relief
Asia shares rally on US inflation relief
7 hours ago | Business
Champions Trophy: PCB choose UAE as neutral venue for India games
Champions Trophy: PCB choose UAE as neutral venue for India games
8 hours ago | Sports