Restoring law and order has become an urgent priority for the country, the Metropolitan Chamber of Commerce and Industry (MCCI) said in its review for the July-September period, titled "Economic Situation in Bangladesh".

Bangladesh's economy has been gradually recovering from political instability, but there are several challenges including high inflation, a slowdown in external demand, a shortfall in revenue collection, slow public spending, diminished job opportunities, and a sluggish investment climate, it said.

"The student movement led to a change in government and has resulted in an ongoing transition period. During this period, the economy has shown some improvement, with gradual increases in exports, imports, remittances, and foreign exchange reserves," it said.

"Therefore, the performances of the selected economic indicators are mixed. Exports and imports may increase slowly in the next three months due to the economic slowdown."

The MCCI also said remittances may decrease in October before increasing over the next two months, adding that foreign exchange reserves are likely to increase slowly during the second quarter of FY25.

However, inflation may increase in October but is expected to reduce in November and December, it added.

The trade body also said that business in the construction and real estate sector is still sluggish, mainly due to higher costs of property and the lower purchasing power of people as Bangladesh has yet to see a tangible economic pickup.

Besides, the higher prices of building materials have slowed overall construction work, according to the industry people.

The devaluation of the taka against the US greenback is one of the major reasons for the increase in construction costs. The exchange rate has increased to Tk 120-125 per US dollar from Tk 105-107 in January last year.

Amid inflationary pressures, labour and transportation costs have also risen.

Regarding the power sector, the MCCI said Bangladesh is currently suffering from load-shedding to the tune of around 200-2,000 MW daily as demand outstrips production.

Despite the shortfall in electricity generation, the Bangladesh Power Development Board has kept idle six furnace-oil-run power plants, with a capacity of around 600 MW, as the interim government is yet to decide on continuing operations under the "no-electricity, no-payment (NENP)" mechanism.

If these six plants received approval to continue electricity generation under the mechanism, they would be able to contribute to reducing at least one-third of the load shedding without any immediate investment from the government.

Typically, load shedding occurs for only 2-3 hours per day, equating to 30-40 percent of the time when additional power is needed.

At this plant-load factor, which is a measure of how efficiently a power plant is operating by comparing the actual energy it generates to its maximum potential, NENP plants are 8-15 percent cheaper than other high sulphur fuel oil-based plants that require capacity payments.

Meanwhile, economic uncertainty has affected domestic revenue mobilisation, resulting in negative growth in the first quarter of the current fiscal year.

Revenue collection had also been affected by the political turmoil in the wake of the mass uprising that led to the ouster of the Awami League government, the MCCI said.

These naturally had an impact on the collection of customs duties, VAT and taxes.

According to provisional data of the National Board of Revenue, tax revenue collection decreased by 6.07 percent to Tk 70,902 crore in the July-September period of FY25 compared to Tk 75,487 crore in the same period of the previous year.

Meanwhile, foreign investors are hesitant to make fresh investments in the country due to its underdeveloped infrastructure, energy deficits and weak transmission infrastructure, lack of consistency in policy and regulatory frameworks, scarcity of industrial land, corruption, and non-transparent and inequitable application of rules and regulations.

The government must address these impediments to attract more foreign direct investment in order to ensure the country's economic development.