Businesses in Bangladesh managed to demonstrate resilience in 2023 despite lingering challenges stemming from the war between Russia and Ukraine and the fuel price volatility in the international market, said Rupali Chowdhury, president of the Bangladesh Association of Publicly Listed Companies (BAPLC).

"The burgeoning middle-class showed resilience, so businesses survived."

She said though the war was a global phenomenon, Bangladesh was also impacted by its high dependency on fuel imports to run electricity plants.

Chowdhury, a former president of the Foreign Investors' Chamber of Commerce & Industries, says 2023 was a challenging year for businesses except for those in one or two sectors and it started in 2022.

Inflation was high in 2023 due to the exchange rate fluctuation, which ultimately weakened the value of the local currency significantly against the US dollar.

"So, the consumption for products declined in almost all sectors. Even, the demand for fast-moving consumer goods dropped. As a whole, consumption has reduced," she said.

Moreover, she said, businesses could not pass the full burden of the currency depreciation to customers since it could bring down the demand further. Large firms were able to continue their operations while it was very challenging for small and medium enterprises.

Currently the managing director of Berger Paints Bangladesh, Chowdhury says the companies that were in expansionary mood could not open letters of credit (LCs) to import capital machinery.

The LC opening situation was tough initially before seeing some improvement. But it has come under stress recently, maybe for the uncertainty surrounding the national election.

She said some companies are supplying products to government projects, but the supply shrank as the projects are moving at a slower pace.

Fortunately, the electricity situation did not worsen as businesses had feared at the start of the year although the price rose significantly. The supply of gas was, however, in bad shape, inflicting damages on industries.

"The high price of fuels ultimately raised the costs of production. Therefore, it was difficult to maintain profitability for the companies that did not cut jobs or salaries."

According to the CEO, multiple exchange rates and the volatility in dollar prices also hit businesses in the just-concluded calendar year.

"2023 was the most difficult year for all."

Still, Chowdhury sounds optimistic about 2024.

If Bangladesh can borrow $8 billion to $10 billion from the World Bank and other multinational development partners, the situation will improve, she said.

"We are hopeful as the agricultural sector is doing well. And we hope the country will come out of the current situation."