A silver lining seems on the horizon as Bangladesh joins humanity to bid farewell to 2022 at sundown today with bitter feelings as price spirals following supply crunch and dollar spikes battered life.
The pandemic corona had impacted the economy since 2020 and the outbreak of Ukraine war in 2022 rubbed salt into the wounds while there were signs of a rebound in sight-making the year annus horribilis.
Investment from the private sector hit rock bottom and the capital market remained bearish almost the whole year, now being rung out.
That part of the outgoing calendar apart, people and policymakers hold hope for the better in the incoming-year 2023, though concern persists over political uncertainty and inflation as well as possible recession across the globe.
While ringing out the bygone year today (Saturday), many believe that the coronavirus-free environment may boost the economy once the global and domestic fronts calm down in 2023.
However, in the outgoing calendar year, Bangladesh's three megaprojects -- Padma multipurpose bridge, Ctg Bangabandhu tunnel, and Dhaka's metro-rail opening--were a piece of good news to rejoice in.
Dr Ahsan H. Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), feels that inflation that hit hard people in 2022 may ease in 2023 on grounds of the falling trend in prices of commodities on the international market.
"Both domestic supply and international supply will be adequate and the price may get stabilised in 2023," he says.
He mentions that Aman paddy production was good and the winter crops were also plentiful, which may lead to a fall in the prices of vegetables and cereals in 2023.
The economist, however, predicts that the forex market that was too volatile in 2022 may persist even for six more months into 2023.
"We must ease the regime of letter of credits or imports and this will help fuel the forex market up until June next year."
He also points out that if the capital flight continues, the forex market may get more volatile.
He says the financial sector may further weaken in the new year as there is no action so far relating to non-performing loans and scams in the financial sector.
Dr Zaid Bakht, former head of research at the Bangladesh Institute of Development Studies (BIDS), strike a positive note as he says the country has absorbed the impact of the war in Ukraine.
Dr Bakht, now chairman of the state-owned Agrani Bank, told the FE that the private-sector investment would pick up as the central bank is gradually easing the existing import tightening.
He, however, said the government and the policymakers should care about the inflationary pressure as it grows at a time when the economy sees pickup.
He notes that the private-sector-credit flow was on the up and "we expect a strong rebound of the economy in 2023".
Dr Monjur Hossain, director (Research) at the BIDS, told the FE that inflationary pressures may ease in the coming 2023 once the war in Ukraine stops and subsequent developments happen especially in the oil and commodity markets.
"To my mind, the Ukraine-Russia war may stop within next six months."
He says the GDP output may slow in 2023 as everything depends on the global situation.
