Welcome 2023 AD, the year that is preceded by one of the most difficult periods in history. People are pinning high hopes on the New Year, expecting an economic turnaround.
It is expected that a tolerable inflationary pressure might in place with coronavirus is almost out of the way now and the labour force participate in economic activity in full swing.
Knowledgeable quarters told the FE that socio-economic recovery will pick up the new year, 2023.
They also mentioned that the higher inflation that hit hard the people in 2022 may ease in 2023 as the global outlook of the commodities and futures are on the silver lining. The domestic output, ranging from agriculture to manufacturing, has been showing upwards.
The pandemic Covid-19 has impacted the economy since 2020 and the outbreak of the Russia-Ukraine war in 2022 rubbed salt into the wound while there were signs of a rebound in sight, making the past year an annus horribilis.
Investment from the private sector hit rock bottom and the capital market remained bearish almost all year, now being rung out.
That part of the outgoing calendar apart, people and policymakers hold out hope for the better in 2023 as an annus mirabilis, though concern persists over political uncertainty and inflation as well as possible recession across the globe.
Dr Zahid Hussain, former lead economist of the World Bank, told the FE: "There are many hopes in the new year but it depends on the how we taking measures to combat the changes."
He pointed out that poor remittances inflow, forex market volatility and inflationary pressure may stay a few months more.
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 a falling trend in prices of commodities on the international market.
He said Aman paddy production was good and winter crops were also plentiful, which might lead to a fall in the prices of vegetables and cereals in 2023.
The economist, however, predicted that the forex market that was too volatile in 2022 might persist even for six more months into 2023.
If the capital flight continues, he pointed out, the forex market might 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), said 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 noted that the private-sector credit flow was on the up and expected a strong rebound of the economy in 2023.
Dr Monjur Hossain, director (research) at the BIDS, told the FE that inflationary pressure might ease in 2023 once the war in Ukraine stops and subsequent developments happen, especially in oil and commodity markets.
"To my mind, the Russia-Ukraine war may stop within next six months."
Md Jashim Uddin, President,
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI)
The government should ensure uninterrupted supply of low-cost energy in 2023 to keep industrial production smooth.
He said the apex chamber proposed to ensure supply gas even by raising its prices in a bid to facilitate businesses generate power. Power generation costs go up when diesel is used. After winter season, demand for power will go up significantly.
The FBCCI president urged the government to relax restrictions on the opening of letters of credit (L/Cs) for import of intermediate goods and industrial equipment.
At the beginning of 2023, there will be a huge demand for raw materials ahead of Eid-ul-Fitr. Economic activity rises centring ahead of the holy festival. The austerity policy adopted by the government has to the relaxed.
He said 2022 passed off well as large infrastructure projects like Padma Bridge and Metro Rail were opened.
Abu Kashem
Former president of Dhaka Chamber of Commerce and Industry (DCCI)
The early part of 2022 was in a recovery phase from the Covid-19 pandemic, but it faced hindrances due to the Russia-Ukraine war.
The economy might face an energy crisis in 2023 too. He suggested making the best use of the country's demographic dividend, incentivising remittance earners to discourage hundi transaction and encourage exporters to cope with the pressure.
Humayun Rashid, President
International Business Forum of Bangladesh (IBFB) Managing Director and CEO of Energypac Power Generation Ltd.
The year 2023 would be a year, in which the authorities should do the groundwork to attract the investors planning to relocate from China. The geopolitical tensions worldwide prompt many investors to find an alternative destination for relocating their investment.
Bangladesh needs to grab this opportunity. It should focus on infrastructure, good governance in the banking system, tax and infrastructure. From the start, the country needs to earn investors' confidence to attract both foreign and local investment for generating jobs for young workforce.
In the just-concluded 2022, we have received infrastructure, though it was a challenging year globally.
Addressing challenges, including devising mechanism for taming worldwide energy and food crises, would be the next big task in 2023 for the country.
