A weak investment climate, coupled with political instability and uncertainty, brought investments to a standstill, leading to rising poverty through reduced real income and higher unemployment, the think tank said in its monthly macroeconomic insights.
PRI principal economist Ashikur Rahman presented the insights in Dhaka.
The paper recommended rethinking about the expansion of social-safety nets and accelerating projects under the Annual Development Programme (ADP) to boost cash flow to the poor.
Business leaders at the event lamented high business costs—driven by a lack of energy security, political uncertainty, extortion and harassment by tax authorities—along with elevated interest rates as key factors behind weak private-sector investment.
Cautioning about rising unemployment and poverty, they warned that investment and economic growth are unlikely to recover unless these uncertainties are addressed.
The weak investment climate is also reflected in falling capital-machinery imports and a slowdown in construction activity.
High borrowing costs, timid credit growth and cautious deposit mobilisation have further dampened the investment outlook.
ALCHEMPro News Desk (DS)
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