ICCB discusses ways to address challenges for Bangladesh economy

ICCB discusses ways to address challenges for Bangladesh economy

Dhaka, June 29 - International Chambers of Commerce Bangladesh (ICCB) President Mahbubur Rahman has said, since the Russia-Ukraine war broke out in February 2022, Bangladesh has been experiencing economic crisis due to escalated prices of global commodities since the country's foreign currency reserves depleted fast amid higher import bills.

The recent Middle East tension is also hurting the economy as the dollar crunch shows no signs of disappearing, forcing the Bangladesh Bank to maintain import restrictions, squeezing supply, he noted.

The World Bank has predicted Bangladesh's real GDP growth to remain relatively subdued at 5.6 percent in FY24, compared to the average annual growth rate of 6.6 percent over the decade preceding the Covid-19 pandemic, said the ICCB President while presenting the Executive Board report at its 29th Annual Council held in Dhaka on Saturday.

Bangladesh's economy made a strong turnaround from the COVID-19 pandemic, but the post-pandemic recovery continues to be disrupted by high inflation, a persistent balance of payments deficit, financial sector vulnerabilities, and global economic uncertainty, according to the World Bank twice-yearly-update released on 2 April 2024.

ICCB Executive Board suggested addressing some key issues to minimize post- graduation challenges.

These are : Bangladesh needs significant structural reforms to address the complex set of challenges on its path to achieving Upper-Middle-Income-Country status by 2031; In anticipation of this transition, Bangladesh needs to adopt policies to boost trade competitiveness and broaden its participation in bilateral and multilateral free trade agreements; Creating an efficient resolution framework for NPLs is urgently needed to maintain financial stability and revive private sector credit; Bangladesh currently collects approximately half of its potential revenue, given its economic structure, level of development, and trade openness.

The low revenue collection significantly limits the fiscal space necessary for critical public investments in sectors such as energy, transportation, municipal infrastructure, human capital development, and social sector spending to support vulnerable sections of the population; Urgent monetary reform and a single exchange rate regime will be critical to improve foreign exchange reserves and ease inflation; To attract foreign investments and ensure a sustained growth path, Bangladesh needs to focus on governance, legal predictability, and building a stable legal environment; As Bangladesh steps into 2024, it faces macroeconomic challenges, but the indicators suggest a positive outlook.

The nation must continue diversifying its economy, invest in infrastructure, both physical and digital, and focus on human capital development; with the right strategies, Bangladesh can emerge as a shining star in Asia, according to ICCB.

The people's resilience, coupled with a government committed to overcoming obstacles, positions the country for positive outcomes.

Another challenge will be navigating external economic policies in an increasingly complex global order, this will not be easy for a least developed country (LDC) like Bangladesh. So, to maintain balanced economic relations with countries like China and the US will be crucial.

Geopolitical tensions have become the single most important risk confronting the global economy.

The New Executive Board of ICC Bangladesh was announced for the period April 2024 to March, 2026.

The meeting was attended, among others, by ICCB Vice President A. K. Azad M.P.; FBCCI President Mahbubul Alam; DCCI President Ashraf Ahmed; MCCI President Kamran T. Rahman; CCCI President Omar Hazzaz; BIA President Sheikh Kabir Hossain; Shohagpur Textile Mills Limited Chairman & CEO Abdul Hai Sarker; Evince Group Managing Director Anwar-ul-Alam Chowdhury (Parvez); IOE (Bangladesh) Limited Chairman Aftab Ul Islam, FCA; Mujibul Cezanne Hasan, Country Director, Swisscontact & S. M. Moinul Islam, Managing Director, Tyser Risk Management Bangladesh Limited (TRMBL).-UNB