Inflation emerges as a key challenge to economic recovery28 November 2021
inflation amid price hike of essentials and fuel is among some headwinds
businesses spotlight as key challenges facing the Bangladesh economy
while bouncing back from the pandemic-induced slump. Apart from the
rising inflation, business body Metropolitan Chamber of Commerce and
Industry (MCCI) has listed a reduction in remittances, slow rollout of
the corona vaccination and any new wave of the Covid-19 pandemic as the
challenges on the economic front of the nation, which has just been
certified by the UN to graduate from LDC status. The MCCI said that some
of the economic indicators appear to be less promising than projected
earlier when the economy had been showing some signs of recovery since
its reopening from a corona-created deadlock.
The fiscal framework continues to be weak in view of poor achievements on some fiscal fronts, more specifically, both in terms of revenue mobilisation and public expenditure. Unemployment and investment both remained challenging. A significant increase in public and private investment is necessary to maintain competitiveness and generate further growth. The inflow of remittances in the July-September period of FY21 decreased significantly by 19.45 per cent to US$5.41 billion from US$6.71 billion in the corresponding months of the previous fiscal year.
Decline in remittances is a reflection of the second wave of Covid-19 pandemic situation when many Bangladeshi migrants lost their jobs, some migrants were laid off by their companies. Many others returned home and couldn't go back due to suspended international flights and unmet vaccination requirements. Reduction in coronavirus incidence gradually made majority businesses hopeful about the recovery of the economy. The stimulus packages comforted the business groups, from large farms to petty micro-enterprises, which eventually helped the economy to get a boost again. Price hike of essential products and fuel is surely making the growth and recovery more difficult.