MCCI sets out 7 economic priorities for new govt

The government must address seven major economic challenges, including persistent inflation and energy constraints, through coordinated reforms to restore growth and strengthen economic resilience, speakers said yesterday.

Bangladesh’s economy faces multiple structural obstacles, as highlighted at the launch of a publication by the Metropolitan Chamber of Commerce and Industry (MCCI) titled “Reviving Private Sector-Led Economic Growth: Critical Issues and Priorities Facing the New Government in Bangladesh”, organised jointly with Policy Exchange Bangladesh in Dhaka yesterday.

The report identifies seven priority reform areas: macroeconomic stabilisation, fiscal management, financial sector reform, export competitiveness and diversification, revitalising private investment, energy security and skills development for employment.

Presenting the report, M Masrur Reaz said Bangladesh’s economic management requires an integrated approach as multiple structural constraints are slowing investment, exports and job creation.

He said the country entered a macroeconomic crisis in mid-2022 when inflation rose to around 13-14 percent, foreign exchange reserves dropped from nearly $48 billion to about $19 billion, and the taka depreciated sharply.

Although reserves have recovered to around $28-29 billion, major vulnerabilities remain.

Economic growth has slowed to about 3.49 percent, while the tax-GDP ratio has fallen to around 7 percent and debt servicing now accounts for roughly 21 percent of the national budget.

Private investment has declined from 24.9 percent to 22.5 percent of GDP, while foreign direct investment remains below 1 percent of GDP. Export concentration is another concern, with the readymade garment sector accounting for about 81 percent of exports.

The report recommends key reforms within the government’s first 100 days, including improving macroeconomic coordination, adopting a market-based exchange rate and launching investment climate reforms to restore investor confidence and revive growth.

Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre, said the private sector must re-establish an independent and constructive voice in national policymaking following the political transition.

He noted that during the previous long period of authoritarian governance, many private sector bodies lost their independent voice and became extensions of political processes.

Dewan Hanif Mahmud, editor of The Daily Bonik Barta, said Bangladesh should conduct forensic audits of major state-owned institutions to understand the true condition of the economy.

He stressed that forensic audits should be carried out in key state entities, including banks and energy institutions, to determine their financial health and asset quality.

Kamran T Rahman said Bangladesh’s economic recovery remains fragile despite some easing of balance of payments pressure and inflation.

He warned that LDC graduation will bring new challenges, including reduced preferential market access, tougher compliance requirements and sharper global competition.

Habibullah N Karim, vice president of MCCI, and Farooq Ahmed, secretary general and CEO of MCCI, also spoke at the event.