Investment Is Still A Challenge in Bangladesh


Bangladesh’s foreign exchange reserves hit a record $32.09bn at the end of December, the central bank said on Tuesday, up $720m from the previous month.

The reserves were sufficient to cover about nine months’ worth of imports, and are $4.6bn higher than the last year.

Steady garment exports and remittances from Bangladeshis working overseas, the key drivers of the country’s more than $200bn economy, have helped build reserves in recent years.

In 2016, Bangladesh made a mark in the areas of poverty alleviation, growth, forex reserves and inflation. But private sector investment caused for uncertainty in the near future.

The inflation rate at the end of December last year was at 5.03 percent on a point-to-point basis. The government has earmarked bringing down inflation levels to 5.3 percent during the 2016-17 current fiscal.

According to planning ministry, the decline in inflation is a generally conducive economic atmosphere across last year.

Analysts say, private sector investment usually lifts up pace with increased public sector investment.

Bangladesh has to front a common case in the last five years when public sector investment rose heavily, but the private sector remained fixed at just above 22 percent of the GDP.

Business Analysis say high lending rates and poor infrastructure, particularly inadequate power and gas supply, discouraged them from new and also further investing.

Even with private sector investment lagging behind, the government has made some major investments in the public sector last year. Moreover, a few other mega projects are underway.

Almost half the work on the Padma Bridge has been completed, which is aimed to complete it by 2018.

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