GDP Growth Under Pressure Amidst Fragile Recovery, Says MCCI

The Metropolitan Chamber of Commerce and Industry (MCCI) has warned that Bangladesh’s GDP growth remains under significant pressure, despite signs that the economy is gradually moving towards recovery. In its review report on the third quarter (January–March) of the 2024–25 fiscal year, released on Wednesday, the MCCI painted a cautiously optimistic picture.

According to the report, export earnings and remittance inflows have played a vital role in stabilising foreign exchange reserves, while rural economic activities are showing signs of renewed momentum. These developments are contributing positively to the country’s macroeconomic landscape.

Growth in the agriculture and industrial sectors saw a modest rise during the third quarter. However, agricultural loans dropped by nearly 7%, while revenue collection posted a moderate increase of 2.76% year-on-year.

🏦 Banking Irregularities Still Haunt the Economy

The MCCI identified the widespread irregularities and loan scandals in the banking sector during the tenure of the previous Awami League government as a major barrier to economic progress. The report criticised the regulatory failures that enabled these issues and stated that such mismanagement has delayed economic recovery.

Nevertheless, the MCCI expressed hope that recent reform initiatives by Bangladesh Bank—aimed at restoring public trust and improving governance—would contribute significantly to reviving GDP growth.

🌍 Global Geopolitical Uncertainty a Key Concern

The report also emphasised the growing impact of global geopolitical instability. It warned that ongoing international conflicts and uncertainties could affect Bangladesh’s social, political, and economic stability. The country still faces multi-dimensional challenges, including a 14% decline in foreign aid disbursement.

While the export sector, particularly the ready-made garments industry, has shown signs of stabilisation, foreign direct investment (FDI) continues to perform poorly. FDI inflows have fallen by 26% in the first nine months of the current fiscal year. Compared to competitor economies, Bangladesh’s FDI levels remain significantly lower.

📉 Trade & Inflation Trends

Bangladesh Bank data cited in the report reveals that both exports and remittances rose appreciably during March and April, offering temporary relief in dollar supply. Simultaneously, imports have surged, rising 15% in March compared to the same month the previous year.

Inflation, which had been on a downward trend for three consecutive months, saw a slight increase in March, reaching 9.35%, up from 9.32% in February.

🍚 Food Security & Grain Imports

On food security, the MCCI reported that total food grain imports (rice and wheat) by both public and private sectors in the third quarter stood at 5.03 million metric tonnes—an increase of 17.8% compared to the same period last year.

📊 Long-Term Reform Crucial for Sustained Growth

In conclusion, the MCCI cautioned that while the economy is beginning to rebound, long-term sustainability will depend on several critical reforms:

• Overhauling the banking sector,
• Ensuring transparency in policymaking, and
• Creating a more investment-friendly environment.

Only through decisive and sustained reform, the MCCI argues, can Bangladesh ensure robust and inclusive economic growth.