• Capital machinery imports rise 23 percent •Private sector credit growth hits 22‑year low •Economists caution recovery remains modest, fragile •World Bank projects 4.8 percent GDP growth # Bangladesh's investment shows early signs of revival, with letters of credit (LC) for capital machinery imports rising over 20% year-on-year in the first quarter, despite sluggish private sector credit growth, which hit a 22-year low in early FY26. Bangladesh Bank data indicates a 23% increase in LC opening for capital machinery to $472 million from July-September, from $384 million in FY2024, down 41% YoY. LC opening for intermediate goods rose 1.59%, reversing a 7.22% decline, while raw material LC increased 5.73%, up from 4.66%. Economists warn the growth is modest, not indicating full recovery. Zahid Hussain notes investors are cautious, not ready to invest heavily. Prof Rahman explains the situation has shifted from negative to positive but credit growth remains below the 11% target, at just 6.35% in two months, mostly for export sectors, with domestic investments stagnant. Despite positive signals post-election announcement, private sector growth remains low, with only a slight rise, mainly due to machinery replacement, not expansion. Hussain emphasizes the numbers don't show a strong recovery yet, with 22% growth in machinery imports totaling about $400–$500 million, insignificant for a $400 billion economy. Experts suggest cautious optimism, similar to recent student election models, as growth projections from multilateral partners, like the World Bank's 4.8% in FY26, indicate moderate improvement, supported by easing inflation and a slight recovery in private consumption. However, private investment remains weak at 1.9%, below a decade's 7.4%, and policy uncertainty may hinder growth. Public investment will stay subdued ahead of the election. Export growth remains strong despite tariff changes, with imports expected to rise as demand and external constraints ease. (ICE NEW DELHI)

Fonte notizia: The Daily Star