Despite facing structural shifts, the country’s private sector has shown a positive outlook in cumulative business sentiment—represented by an overall score of 6.69, the report noted.
Bangladesh’s business consulting firm LightCastle Partners launched the fifth edition of its index in Dhaka recently.
Domestic small and medium enterprises (SMEs) have fared better (14.91) than domestic conglomerates and multinational corporations (6.31).
The difference in scores is primarily driven by external factors as the performance of the larger organisations tends to fluctuate more significantly with the changes in the global market, the report noted.
But despite being positive, the 2023 BCI is relatively lower than the previous year's, indicating a subtle deceleration in overall business sentiment. Slower economic growth, rising costs and reduced consumer demand have contributed to a lower but positive confidence index in this fiscal.
Rising cost of raw materials, lack of beneficial policy implementation, difficulty in accessing finance, weak demand and inefficient human resources were ranked as the top five problem areas by respondents in the survey.
Nearly 70 per cent of respondents reported being affected by the rising cost of raw materials and weak demand. Financial challenges resulted from financial irregularities, high level of non-performing assets, cash shortage, reduced savings and currency devaluation.
Inefficient human resources and lack of beneficial policies have been consistent issues in previous BCI surveys.
Rising expenses and difficulties in managing operational cash flow have led companies to abandon their hopes of higher profitability in the next six months, the survey found. They are also forfeiting further investments to maintain necessary cash reserves to withstand any potential volatility.
ALCHEMPro News Desk (DS)
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