Credit growth for private sector revised upward

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Doulot Akter Mala
The working group for the Medium-term Macroeconomic Framework (MTMF) has revised domestic credit growth upward for the private sector at 18.5 per cent, up by 1.5 percentage points for fiscal 2008-09.
The MTMF team of the finance ministry has projected 19 per cent domestic credit growth for 2009-10 and 19.5 per cent for 2010-11.
The working group, headed by Arastu Khan joint secretary of the finance ministry (budget-1), at its first meeting recently revised the indicator for the next three years following trend of international market.
It will sit again in January next to review the indicators.
Talking to the FE, working group leader Mr Khan said: "Global economic slowdown will not have any negative impact on our economy. The MTMF projection will be reviewed in January next to see if the was any impact on the economy."
Main objective of the MTMF projection is to help the policy makers frame plans in line with the projected indicators of available resources, he said.
The group has revised major macro-economic indicators like broad money growth, net domestic assets and gross foreign exchange reserve for the next three years.
An upward growth of broad money has been shown due to conflicting projections on inflation made by the Bangladesh Bank (BB) and the Ministry of Finance, officials said.
According to finance division, inflation is estimated at 9.0 per cent for the current fiscal while BB's projection is 9.5 per cent.
The MTMF working group has revised the broad money growth downward to 16.5 per cent for the current year, less by 0.4 per cent as projected in the budget.
However, the broad money growth has been estimated at 16 per cent and 15.7 per cent for 2009-10 and 2010-11 respectively.
Net domestic asset has been re-fixed upward to 18.5 per cent from 17 per cent set in the national budget for fiscal 2008-09. The MTMF team has projected a steady 17.5 per cent growth of net domestic asset for the next two years.
Gross foreign exchange reserve has been set at $ 7.0 billion, up by 1.0 billion for the current year, and $ 7.5 billion and $ 8.0 billion for the next two fiscal.
The MTMF working group has also recommended upward revision of tax revenue growth target to 17 per cent from 15.2 per cent.
The upward projections of macro-economic indicators have been prompted by declining trend of prices of fuel, food grains, high growth of remittance and export, a finance ministry official said.