The economic collapse is unstoppable: Export earnings continue to decline, sector stakeholders are disoriented

Staff Correspondent

The economic collapse is not stopping. Recent reports by domestic and foreign organizations, including the World Bank, have revealed concerns and fears. The sad face of all sectors, including GDP, foreign investment, and the banking sector, is visible. The once stable export sector has also now collapsed. The country’s export earnings have decreased for two consecutive months in August and September this year, which has raised concerns among economists and trade analysts.

At the same time, the overall economic picture has become more complicated due to high inflation, investment stagnation, and credit constraints. Economists are seeing a dark picture.

The Export Promotion Bureau (EPB) said the country’s export earnings fell by 3 percent in August and 4.61 percent in September. The recent decline, according to experts, indicates a deeper crisis.

According to analysts, the US counter-tariff policy, reduced demand in Europe and rising raw material prices are the main reasons for the decline in exports. Ready-made garments, home textiles, agricultural products, jute and plastic products – all have seen a decline in exports.

Private sector investment in the country has virtually come to a standstill due to high interest rates and political uncertainty. According to Bangladesh Bank, credit growth fell to 6.35 percent in August, the lowest since 2003. Entrepreneurs say it is not possible to take risks on new projects with high-interest loans.

Dhaka Chamber of Commerce and Industry President Taskin Ahmed said, “Investors are cautious due to political instability and high interest rates on loans. The situation may improve if stability returns after the elections.”

According to the Bangladesh Bureau of Statistics (BBS), general inflation rose to 8.36 percent in September. Inflation in food items was 7.64 percent and in non-food items was 8.98 percent. There is a huge jump in the prices of daily necessities including vegetables and green chillies.

Experts say the rainy season, supply shortages, and the dominance of middlemen are responsible for this situation.

In a recent meeting with Bangladesh Bank, the country’s top businessmen claimed that the current interest rate of over 14 percent is a major obstacle for the country’s businesses. The FBCCI Secretary General said, “If interest rates are not brought down to single digits, investment will not increase and inflation will not be controlled.”

The businessmen also requested an extension of the term of the Restructuring Committee for borrowers affected by Corona, war, and political unrest.

Bangladesh’s economy is facing a ‘buzz’ or complex crisis due to political instability, fuel shortages, inflationary pressures, credit constraints and investment stagnation. Analysts believe that the economic trend can turn around if political stability returns after the elections, but it will depend on effective policy decisions and implementation.