Bangladesh's economy remained in a contractionary phase in September, continuing the trend seen in July and August, though the pace of contraction has slowed, according to the Purchasing Managers’ Index (PMI).
The PMI in September stood at 49.7, up from 43.5 in August. A PMI reading below 50 indicates economic contraction.
The PMI, developed on a scale of 100, is jointly published every month by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange.
The data from September suggests that the economy is gradually improving compared to August, though challenges remain in business operations.
Despite some signs of recovery, the economy has been contracting for three consecutive months.
The political instability that began in July, culminating in the fall of Sheikh Hasina’s government on 5 August, continues to weigh on the economy.
PMI is calculated based on the performance of four key sectors - agriculture, manufacturing, construction, and services.
Only the manufacturing sector returned to expansion in September, while the other three sectors remained in contraction.
Bangladesh’s four major economic sectors contracted sharply in July, following the unrest caused by the quota reform movement.
The PMI dropped to 36.9 in July, down from 63.9 in June—a staggering decline of 27 points in just one month.
While conditions have improved since then, the economy has yet to return to expansion. The PMI has rebounded by nearly 13 points since July.
However, the PMI report notes an optimistic outlook for future business activity.
Rapid expansion is expected across all major sectors, including agriculture, manufacturing, construction, and services.
While industrial zones continue to face disruptions, production has begun to recover, and the manufacturing sector has returned to growth in September. This gives industry leaders hope for the future.
