In the fiscal year (FY) 2023-24,Bangladesh’s investment-to-GDP ratio declined by 0.25 percentage points to 30.70 percent,based on official data, indicating a potential slowdown in up coming economic growth.
Businesses say they are delicately assertive, as a combination of factors has discouraged new investments since the Covid-19 pandemic, such as a depreciating taka, spiking cost of living, and political uncertainty.
In the upcoming future, due to economists, this plummeting investment could turn into fewer jobs and lackluster economic growth in the upcoming future.
The investment-to-GDP ratio is is related to the percentage of a country’s gross domestic product (GDP) indicated to investment activities.
This helps to see how much of a nation’s economic output is being reallocated in its future,, although the acquisitiontion of capital goods like machinery, infrastructure,, and buildings to facilitate an increase.
Bangladesh Bureau of Statistics (BBS)latest data shows that both private and public sector investments have been dropping in certain years.
In 2022, the Russia-Ukraine war, which broke out, was due to the global supply chain interruption, pushing up Bangladesh’s import bills.
Hence, the country’s fast-depleting foreign exchange stores led to the local currency dropping sharply against the US dollar.
The depreciation of the taka made imports more expensive, increasing the cost of capital goods and raw materials important for investment.
Since March 2023, the determinedly high price, which has risen above 9 percent, has squeezed away incomes and corporate earnings, reducing funds available for reinvestment.
Additionally, political uncertainty has compounded the situation. Repeated policy shifts, regulatory changes, and political unrest have made investors cautious, even leading them to postpone or cancel planned investments.
Source: The Daily Star
