No need to panic about ongoing economic crises: DCCI

The Dhaka Chamber of Commerce and Industry (DCCI) says that there is no need to panic about the ongoing economic crises in Bangladesh as the country has experience in overcoming such obstacles.

Bangladesh is currently facing various challenges, such as difficulties in opening letters of credit (LCs), amid high inflationary pressure and low foreign currency reserves.

Besides, the country continues to struggle with a high rate of non-performing loans (NPLs), volatility in the financial market, poor balance of payments and depreciation of taka, the local currency.

However, the inflationary pressure is not exclusive to Bangladesh as it has affected countries worldwide.

"And compared to them, we were less affected," said DCCI President Ashraf Ahmed while briefing reporters about the current economic climate at his office in Dhaka today.

The new government and Bangladesh Bank see inflation as a major challenge. So, taming the consumer price index is a priority task for them.

On the other hand, the DCCI head believes this situation to be the new normal.

Inflation in the country has been running at well above 9 percent since March last year.

When unveiling the new monetary policy on January 17, Bangladesh Bank Governor Abdur Rouf Talukder informed they are not concerned about the country's GDP growth and aim to bring down inflation to the desired level.

"Bangladesh has changed over the last 15 years. We are no longer an agriculture dependent country as the industrial sector's contributions to the economy have increased," Ahmed said.

Additionally, the country's forex reserve did not fall drastically as its current volume is still sufficient for covering the import bills of more than three months.

The forex reserves have fallen from $24 billion before the Covid-19 pandemic to $21 billion as per calculations by the International Monetary Fund.

"But people think the reserves fell from $44 billion to $21 billion, which is not correct," he added.

The country's forex reserves stood at $20.03 billion as of January 17, down from $40.7 billion as of August 2021, according to data of Bangladesh Bank.

The DCCI President also lauded the decline in poverty over the past two decades.

Ahmed said Bangladesh's debt to GDP ratio is still lower in comparison with the various neighbouring countries, and the country has the scope to borrow from foreign sources.

The DCCI president said assets of the banking sector increased by 5 times in the last 15 years while its rate of NPLs increased only 4.5 times.

According to him, the NPL ratio of the banking sector did not increase heavily.

Ahmed added that around 30 percent of the total NPLs are concentrated in 10 or 12 banks while the others are not struggling with high NPLs.