Experts have termed the country’s overall economic situation positive with the major financial indicators showing an upward trend.
Besides, as the country is witnessing socio-political stability, and foreign investors are showing interest to increase their investment here, the country will be more strengthened economically in the coming days, they observed
Analysts said, despite the presence of some risk factors like marginal growth in remittances, slower growth in the export receipts, and a lower rate of investment, specially FDI, inflation was under control; the exchange rate remained stable; and foreign exchange reserves rose to a comfortable level.
A report on the country’s recent economic situation, released by the Metropolitan Chamber of Commerce and Industries (MCCI) recently said that agriculture, manufacturing and services sectors – all performed well, but continuous government support of various types will be needed to sustain their growth.
The report said, infrastructure deficits and gas and power supply problems are now undermining the performance of all productive sectors of the economy. Government should adopt adequate steps to overcome these problems, and achieve and maintain political stability, essential to creating an investment-friendly climate, crucial to achieving higher economic growth. President of the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI), Shafiul Islam Mohiuddin said that the country has all the preparations to turn itself into the next Asian Tiger, and successfully graduate to a middle-income nation by the year 2021.
He said, the contribution of private sector entrepreneurs cleanly reflects the upward trend of macro-economic drivers like export income, import expenditure, private sector investment and success in meeting the revenue targets set by the government.
“Holding 7 percent plus GDP growth for the few consecutive years resulted in our graduation to a middle income nation, and also helped us to reach the per capita income at $1751. If all the mega projects are implemented timely, we will attain 8 percent GDP growth within the next two months”, Mohiuddin added.
Data suggests that private sector credit accounted for the largest component of bank credit, over 80 percent, with industry and trade & commerce each accounting for 36 percent.
Overall investment in Bangladesh crossed 31 percent of GDP for the first time in its history, last fiscal, because of huge public spending on mega infrastructure projects, now in the implementation process.
In fiscal 2017-18, overall investment to gross domestic product ratio stood at 31.23 percent, 30.51 percent the previous year, according to data from the Bangladesh Bureau of Statistics.
Another study report on the ‘Economic Growth in Bangladesh and the role of banking sector’, released at the Bangladesh Institute of Bank Management (BIBM) recently, mentioned that the country has come a long way in its economic growth , from a meagre $5.70 billion in 1972, the GDP increased to $285.82 billion in 2018, which however, presents only around 0.50 percent of the world economy.
“The Bangladesh economy is the 42nd largest in the world in nominal terms and 31st largest in terms of Purchasing Power Parity (PPP)”, the report said.
The report, prepared by Dr. Barkat-e-Khoda and his team, also said, the economic growth is an important way to improve standards of living of people and achieve economic development.
It said, with acceleration of the growth of per capita income, there has been considerable progress in poverty reduction from 56.7 percent in 1991 to 24.3 percent in 2015, and now it is around 22 percent.
The volume of banking sector’s trade finance has been increasing over time, in 2017 the Private Sector Commercial Banks (PCBs) share in export finance market was highest 60 percent, followed by the State Owned Commercial Banks (SCB).
Referring to central bank’s data, the report mentioned that RMG sector received highest proportion of financing from banks while the import payment including imports of EPZ, increased more than twice from Tk. 148.372.00 crore during 2007-08 to Tk. 345,549.40 crore during the 2016-17. Import payment for all types of cotton has increased 2.8 times, from Tk. 17109.70 crore during 2007-08 to Tk 42826.80 crore in 2016-17.
Managing Director and CEO of Standard Bank Limited, Mamun-Ur-Rashid, told Bangladesh Post that the commercial banks contribute most in the country’s economic development.
He said, the state-run banks are still the big players to invest in big projects of the government compared to the private sector. State run banks have big capital and hold huge liquidity despite continuous financial loss, so they can lend big loan for development projects as they have enough exposure.