Economy recovering, but far short of normalcy: MCCI

Bangladesh's economy has gathered pace but it is far short of reaching normal levels due to the COVID-19 pandemic, the Metropolitan Chamber and Commerce (MCCI) has said in its economic review. 

A large segment of informal industries, services and other activities have resumed operations but they seem to be running at a much lower level than their capacities, it added in the Q1 FY21 review. 

The export-oriented garment and leather, domestic market-oriented steel and food-processing, and transport sectors are not running in full scale yet. 

The pace at which business activities are picking up in some areas of the economy is faster than many others, depending on the demand for goods and services, the review said. 

"However, these positive changes need to be interpreted carefully. Private investors are trying to cope with the situation instead of making further investments," it added. 

The MCCI observed that Bangladesh is now confronting some major challenges in steering its economy to a higher growth trajectory. 

"Such challenges are slow implementation of development projects, low investment and sluggish growth of revenue," pointed out the trade body. 

According to the provisional data of the National Board of Revenue, it collected an aggregate amount of revenue worth Tk49,990 crore in Q1 of FY21 compared to Tk48,017 crore in Q1 of FY20. However, this revenue collection fell short by Tk13,724 crore or 21.54 percent of the target (Tk63,714 crore).

The implementation rate of the ADP in the quarter under review was almost same compared to the previous fiscal year. 

"The implementation of the annual development programme was always slow. The allocation increases every year but the ministries and divisions are unable to spend the budget," said the MCCI review. 

"A significant increase in public and private investment is necessary to maintain competitiveness and generate further growth," suggested the trade body.