Businesses foresee a better 2025 but wary of political uncertainty: EIB

Summary:

• Inflation control and banking reforms seen as key opportunities for 2025.
• Political instability and public order pose greatest risks for businesses.
• High-interest loan burdens and energy costs hinder economic prospects.
• 60% of executives optimistic about earning growth; 15% expect high growth.
• 80% of leaders predict rising production costs, threatening profitability.

Bangladesh's business leaders are optimistic about earning growth in 2025 if inflation is controlled and banking reforms succeed, but they remain concerned about political stability and public order, finds a survey.

In its latest survey, the Economic Intelligence Bangladesh (EIB), a joint research publication by The Business Standard and DataSense, finds that 45% of business executives view inflation coming under control and banking sector reforms as the greatest opportunity for boosting their performance in 2025.

Additionally, increased foreign exchange reserves and the return of Donald Trump as the US president are seen as positive factors for business growth.

A staggering 75% of leaders fear that political uncertainty, along with instability in law and order will pose the greatest risks for businesses in 2025, according to survey results published in the EIB's year-end issue on 31 December.

The survey, "What Lies Ahead for Businesses in 2025", covered 11 diverse sectors including apparel, furniture, tea, aviation, and pharma. It was carried out in December 2024 before the interim government's Chief Adviser Prof Muhammad Yunus said the next national elections may be held at the end of 2025 or the first half of 2026.

More than half, 60%, of business executives surveyed consider high-interest burdens from loans a significant downside for the year ahead. It is followed by high energy and utility prices, and bureaucratic inefficiency.

Md Abdul Jabbar, managing director of DBL Group, said, "I believe that for the betterment of Bangladesh's economy, we must focus on minimising corruption. This will enhance investors' confidence in the ease of doing business and encourage them to invest."

On the other hand, RN Paul, managing director of Pran-RFL Group, said, "My foremost suggestion for 2025 is that, regardless of which government is in power, we as businessmen should not let ourselves be influenced by political affiliations. We must focus on our work and collaborate with the government to ensure they facilitate our efforts effectively."

He further added that a businessman's identity should not be tied to their political preferences. Attempting to leverage political power can backfire.

The survey also asked leaders about their expectations for production growth and costs in the coming year.

A majority, 60%, of the respondents are optimistic about their earning growth, with 15% hoping to achieve high earning growth.

However, the outlook for production costs presents a significant challenge, with 80% of business leaders predicting an increase. Among them, 50% expect a moderate rise, while 30% brace for a steep hike, underscoring concerns about profitability in the year ahead.

The latest EIB issue also features interviews with top business leaders, highlights what to watch in 2025 for Bangladesh, and explores what the re-election of Donald Trump could mean for the global economy.

This edition is available both as a print supplement and online on the EIB website.