GDP Growth Slows as Industrial Sector Takes a Hit

In the 2023-24 fiscal year (FY24), private investment in Bangladesh fell to 23.51% of GDP, down from 24.18% in FY23, reflecting slower industrial growth. Private consumption also decreased by 1.8 percentage points, linked to rising inflation, which averaged 10.59% in the third quarter. Industrial growth declined from 8.37% in FY23 to 6.66% in FY24, while the final GDP growth rate for FY23 was revised to 5.78%, and the provisional estimate for FY24 is 5.82%.

A recent report from the Bangladesh Bureau of Statistics (BBS) has revealed a significant discrepancy in the country's GDP calculations for the fiscal year 2023-24, with Tk 590 billion missing from the GDP count. 

The Metropolitan Chamber of Commerce and Industry (MCCI) has recently released its projections for imports, remittances, and foreign exchange reserves for the next quarter of this fiscal year. According to their estimates, imports are expected to reach $5.68 billion in September, up from $5.52 billion in August and $5.39 billion in July. Similarly, remittances are projected to grow to $2.29 billion in September, an increase from $2.18 billion in August. The foreign exchange reserves are expected to rise to $27.95 billion by the end of September.

Bangladesh's economy is seeing renewed optimism driven by institutional reforms and positive investor sentiment, according to LightCastle Partners' August 2024 update. The Dhaka Stock Exchange's DSEX index surged 12%, adding $5.8 billion in market capitalization following the resignation of Prime Minister Sheikh Hasina.

Following the resignation of Bangladesh's longest-serving Prime Minister, an interim government led by Dr. Yunus is in discussions to address the country's economic challenges. Economists are urging immediate reforms to tackle persistent issues, including high inflation, pressure on foreign exchange reserves, a heavy burden of defaulted loans, and poor governance of financial institutions. Recent setbacks, such as a two-week internet blackout and supply chain disruptions, have exacerbated these problems.

Amid nationwide unrest and an internet blackout, the Foreign Investors Chamber of Commerce & Industries (FICCI) estimates that Bangladesh lost $10 billion per day over the past week.