Economy
Private Investment Dips Amid Industrial Slowdown: BBS
Bangladesh witnessed a decline in private investment as a share of its Gross Domestic Product (GDP) in the last fiscal year, signaling a slowdown in industrial growth, according to the Bangladesh Bureau of Statistics (BBS).
Provisional figures reveal that private investment dropped to 23.51% of GDP in the fiscal year 2023-24 (FY24), a decline from 24.18% in FY23.
Additionally, private consumption contracted by 1.8 percentage points in FY24, largely due to escalating consumer prices and an average annual inflation rate of 10.59% during the third quarter.
These developments have had a tangible impact on the industrial sector, where growth fell from 8.37% in FY23 to 6.66% in FY24, based on provisional data for the first nine months ending in March.
Moreover, the final GDP growth rate for FY23 was revised downward to 5.78%, from the previous estimate of 6.03%. The BBS has provided a provisional estimate for GDP growth in FY24, placing it at 5.82%.
Among the three key economic sectors, services led with a 51.04% share of the country’s GDP, followed by industry at 37.95%, and agriculture at 11.02%.
The service sector witnessed a 0.43% growth uptick in FY24, while the industry sector contracted by 1.71% and agriculture by 0.16% year-on-year.
The industrial sector’s weaker performance is attributed to significant downturns in its three major sub-sectors—large, small, medium, and cottage industries—dampening overall manufacturing, a critical private-sector job provider.
Growth in large manufacturing industries was estimated at 4.65% in FY24, down from 8.39% in FY23. Meanwhile, growth in medium, small, and micro enterprises declined to 5.07%, compared to 9.03% in the previous fiscal year. The cottage industries’ growth rate fell to 6.70%, from 9.97% in FY23.
Value addition across all industrial segments—large, small, medium, and cottage industries—has been on a decline over the past year.
However, the BBS pointed out relatively stronger growth in cottage industries, which contribute about 20% of the total value added in the manufacturing sector. These industries primarily rely on indigenous raw materials, making them less vulnerable to external economic shocks. The data indicated increased production in cottage industries, particularly in food, beverages, tobacco, leather goods, wood products, glass, iron products, vehicle parts, and iron furniture.
Sectoral distribution data show a gradual reduction in agriculture’s GDP share, contrasted by growth in the industry and service sectors.
Despite stable physical output in the agriculture sector, especially in crops and horticulture, its overall contribution to GDP has been diminishing, while the industry and service sectors’ shares have been rising.
The tax-GDP ratio saw an improvement, reaching 8.91% in FY24, up from 7.30% in the previous year.
The budget deficit edged up slightly to 5.11% of GDP in FY24, compared to 4.99% in FY23.
Exports and imports, as a percentage of GDP, fell by more than two percentage points to 28.89% in FY24.
Overall investment, encompassing both public and private sectors, increased marginally by 0.03% in FY24, while domestic savings rose by 1.85% and national savings by 1.91%.
Provisional estimates by the BBS placed per capita GDP at Tk 294,191 ($2,675) and per capita gross national income (GNI) at Tk 306,144 ($2,784) for FY24.
The Kazipara and Mirpur-10 metro stations, which have been closed, are expected to reopen by the end of September, though the exact date has not yet been confirmed. Mohammad Abdur Rauf, Managing Director of Dhaka Mass Transit Company Limited (DMTCL), told TBS that a technical team has been tasked with resolving the issues at the stations.
“We are working to reopen the two stations within this month, but I cannot give a specific launch date yet. We will hold a meeting with the technical team and other stakeholders soon to review the progress. A decision is likely on 18 September,” Rauf said.
He noted that Kazipara station is likely to open earlier due to less severe damage, while Mirpur-10 may face delays as it requires machinery that needs to be imported.
Additionally, Rauf mentioned plans to begin metro rail operations on Fridays starting from 20 September, with efforts being made to meet this timeline.
Dr. Muhammad Yunus, the Chief Adviser of the interim government, has announced the formation of six commissions as an initial step toward reforms, including constitutional amendments. These commissions are expected to begin operations on 1 October and complete their work within three months.
In an address to the nation on Wednesday evening (11 September) from the Chief Adviser’s Office, Yunus outlined the government’s reform agenda. This is his second national address since taking office on 8 August.
Yunus explained that the formation of the six commissions is the first step in a broader plan for constitutional reform. He stated that the commissions would be led by six distinguished citizens, selected based on their expertise. These commissions will tackle various reform areas, and more will be established in the future.
Emphasizing the importance of constitutional reforms for free and fair elections, Yunus stated, “We believe that imposing majority rule through elections, resulting in misgovernance or consolidating all power into the hands of one person, family, or group, is unacceptable. To prevent this, we are considering reforms to institutions like the Election Commission and others involved in the election process. Reforming the police administration, civil service, judiciary, and Anti-Corruption Commission is essential for ensuring fair and transparent elections. These reforms will also contribute to establishing a state system based on public ownership, accountability, and welfare.”
Yunus announced the names of the six commission heads:
- Dr. Badiul Alam Majumdar will lead the Election System Reform Commission.
- Sarfaraz Chowdhury will head the Police Administration Reform Commission.
- Justice Shah Abu Naeem Mominur Rahman will lead the Judiciary Reform Commission.
- Dr. Iftekharuzzaman will lead the Anti-Corruption Reform Commission.
- Abdul Muid Chowdhury will head the Public Administration Reform Commission.
- Dr. Shahdeen Malik will lead the Constitutional Reform Commission.
The Chief Adviser mentioned that the other members of these commissions would be determined in consultation with the heads. Additionally, representatives from the advisory council, students, workers, social movements, civil society, and political parties will participate in the commissions’ discussions.
Yunus expressed hope that the commissions would be fully operational by 1 October and complete their work within three months. Based on the commissions’ reports, the government plans to organize consultations with major political parties. A broad consultation, lasting three to seven days, involving students, civil society, political party representatives, and the government will follow. This consultation will finalize the reform framework and outline its implementation strategy.
Yunus concluded by stating that this initiative will unify the nation, fulfilling the demands of the July uprising and strengthening the country with renewed hope and optimism.
The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has urged the Bangladesh government to implement a more investment-friendly tax structure to enhance foreign investor confidence.
During a meeting on Wednesday (11 September) with the newly appointed chairman of the National Board of Revenue (NBR), Abdur Rahman Khan, FICCI leaders highlighted the need for comprehensive tax reforms that would position Bangladesh as a more attractive destination for foreign direct investment (FDI) and strengthen the national economy.
Zaved Akhtar, President of FICCI, stressed the significance of fully digitising NBR operations, particularly by advancing automation systems to maximise revenue collection, as outlined in the chamber’s press release.
The delegation also recommended the establishment of a dedicated research unit within the NBR to broaden the tax base and increase revenue through in-depth market analysis, identifying gaps between market share and revenue generation.
NBR Chairman Abdur Rahman Khan acknowledged the importance of automation in stimulating economic progress and welcomed FICCI’s research findings on the taxation landscape.
FICCI’s delegation included Senior Vice President Eric M. Walker, other board members, and senior officials from member companies, alongside key officials from the NBR.
