Sunday, 2 October, 2022

Economic crisis global, not Bangladesh’s only

Says state minister for planning at a DCCI seminar

  • Staff Correspondent
  • 15 August, 2022 12:00 AM
  • Print news
Economic crisis global, not Bangladesh’s only
State Minister for Planning Dr Shamsul Alam speaks at a seminar on ‘Bi-annual Economic State and Future Outlook of Bangladesh Economy: Private Sector Perspective,’ organised by Dhaka Chamber of Commerce and Industry (DCCI) in the capital on Sunday.

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State Minister for Planning Dr Shamsul Alam said Bangladesh economy is under stress like other countries in the world due to the global situation.

“But there is nothing to be panicked about it,” he emphasised.

“Not only the Bangladesh economy but the whole world is going through a tough time in terms of economic stress, inflation, fuel price hike and supply chain disruptions,” Dr. Alam commented.

“Bangladesh is not an exception of this global economic chain, but we are not in a position to be panicked about at all,” said the state minister who plays a key role in the government’s most mid and long term planning. 

He was speaking as the chief guest at a seminar on “Bi-annual Economic State and Future Outlook of Bangladesh Economy: Private Sector Perspective,” organised by Dhaka Chamber of Commerce & Industry (DCCI) in Dhaka on Sunday.

Mentioning 23 percent growth in manufacturing sector in the last fiscal year, Dr. Shamsul Alam said facts and figures show that the economy of Bangladesh is on the right track.

As a quick fix for the economy, he thinks that the government should take loan from foreign sources to ease pressure on the US dollars -- a major problem Bangladesh economy is facing now.  

He continued that last year Bangladesh sent about one million workers abroad and its positive impact on inward remittances will be visible soon.

With regard to low revenues, he said full automation of taxation system will reduce harassment as well as boost revenue.    

In his keynote paper, DCCI president Rizwan Rahman showed that the recent 50 percent hike in fuel price and 22.78 percent rise in natural gas price actually resulted from a big mismatch between export and import.

He said disruption in global trade affected essential food supply while the reserve crisis forced to increase external borrowing.

From January to June of FY2022, export was $27.39 billion but the import was $48.16 billion while inflation hit the peak at 7.56 percent, private sector credit growth was 13.66 percent, remittance was $10.79 billion and reserve was $41.8 billion, he added citing the central bank data. 

“All these components showed positive growth except the reserve and inflation. From July to December FY2021 reserve was $46.15 billion,” he pointed out.

The overall global economy has been impacted due to the global crisis and Covid 19 outbreak, he said.

Due to global crisis amid the Ukraine-Russia war, the energy supply chain has been disrupted, exchange rate of Taka depreciated and trade deficit stood at $40.15 billion in FY2022, the state minister mentioned.

According to him, additional cost in the supply chain needs to be lessened to control the food inflation.

International market and price dynamics need to be monitored to avoid irrelevant price shock and essential commodities supply through TCB needs to be expended outside Dhaka, the DCCI president opined.

Rizwan Rahman also suggested ensuring a flexible interest rate regime to reduce inflationary pressure and stabilise forex reserves situation.

In this context, to face the challenges of LDC graduation, Rizwan Rahman suggested expediting bilateral and multilateral Comprehensive Economic Partnership Agreements (CEPA) with selective countries and revision of import tariff structure.

Regarding Fiscal Policy, he said the government borrowing through savings certificates needs to be reduced and cheap sources of funds from abroad must be accessed.

Former FBCCI president and lawmaker Md. Shafiul Islam Mohiuddin said the countries across the world are facing fuel crisis.

“The existing crisis is temporary and the government is managing all these things in an efficient manner,” he said.

Terming business community as the engine of growth, he said that the tax department should be proactive and help business community grow without hassles.

He sought robust conducive policy support from the government so that the vibrant private sector of Bangladesh can contribute more to the economy.   

Executive president of BKMEA Mohammad Hatem said recent diesel price hike will inevitably increase the inflation no doubt, but the government should take initiative of adjusting fuel price quarterly matching with the prices in the international market.

He expressed his dissatisfaction over the huge difference between buying and selling price of dollar in the banks.

BKMEA leader said the difference between buying and selling of dollar should be 1 taka.

Chief Economist of Bangladesh Bank Dr. Habibur Rahman said that any policy issue has some conflicting sides, but Bangladesh Bank is always looking into best balancing of policy guidelines to control the normal money circulation and market.

“We are also thinking options for currency swap with few countries like India and China,” he informed.  

DCCI senior vice-president Arman Haque gave the welcome remarks on the occasion.