Bangladesh's ability to diversify its export products and markets to follow the international buyers' sourcing diversification strategy is going to play a significant role in the country's economic outlook in 2023, said a top banker and chamber leader.
"We need to be mindful that the depressed import for a longer period will have adverse impact on production, the impact of China's return to normalcy on commodity, and demand in export destinations of our products - especially apparels," said Naser Ezaz Bijoy, Chief Executive Officer of Standard Chartered Bank, Bangladesh.
Mr Bijoy is also President of the Foreign Investors Chamber of Commerce and Industry (FICCI).
The good news is that global prices of major commodities have come down by 30-40 per cent from the peak, with combined efforts of the central bank and the commercial banks. Besides, letter of credit (LC) issuance and settlement has come down significantly, and there is an expected inflow of loans from multi-lateral partners, he added.
"All of these should start contributing to improvement of forex liquidity situation in the first quarter (Q1) of the 2023."
Over 1.0 million compatriots left Bangladesh in 2022, who are expected to contribute to increase home remittance to Bangladesh, if law-enforcers take decisive actions against illicit forex outflows, and the forex market moves to market-based rates, the FICCI chief opined.
The organisations with nimble cost structure and ability to respond promptly to market changes are likely to fare better than the others.
The government's acceleration of digitisation process would help reduce system losses, he added.
Mr Bijoy noted that the just-concluded 2022 was yet another challenging year. After a vibrant Q1 of economic activities and while on the path of strong recovery from global onslaught of the pandemic, the world had to face another strong headwind from geo-political fallout of the Russia-Ukraine war.
This time, the world saw elevated levels of inflation, followed by an unprecedented synchronised global monetary policy tightening. These created an adverse impact on volatility of interest rate, foreign exchange and commodity prices in global as well as in local markets.
Forex liquidity tightness has been on the top of everyone's mind during most part of the year 2022, the FICCI chief noted.
"However, we believe that the long-term potentials of Bangladesh should not be defined by the near-term challenges," he added.
