The government is considering setting the Gross Domestic Product (GDP) growth target at 7.3 per cent for the next fiscal year (FY) amid some possible challenges in respect of investment, resource mobilisation and continuation of political stability.
The possible GDP growth projection was also placed before Prime Minister Sheikh Hasina in a meeting on the budget for FY 2014-15. Finance Minister AMA Muhith along with some top officials of the ministry of finance (MoF) attended the 'confidential' meeting Monday last.
Sources concerned said the GDP growth projection was being made with the expectation of more normal economic activity in the next fiscal than that in the current fiscal.
The GDP growth target has been set at 7.2 per cent for the current fiscal year. In a recent report placed before the parliament, Mr Muhith expressed optimism about achieving the projected growth rate in the current fiscal.
However, development partners including World Bank (WB), Asian Development Bank (ADB) and International Monetary Fund (IMF) predicted the GDP growth would be below 6.0 per cent for the current FY.
Also the Bangladesh Bank (BB) in its monetary policy, released in January last, said the economic growth rate would hover between 5.7 per cent and 6 per cent in the FY 2013-14.
A senior MoF official said the government would follow the sixth five-year plan as a base for preparing the budget for the upcoming fiscal.
"Growth projection will be above 7.0 per cent for 2014-15, as we hope economic activities will not face hindrance as in the current fiscal," he further said.
"Import of products started increasing, that is a positive signal for internal revenue collection," he added.
Sources concerned said the growth in tax revenue collection might be set at 20 per cent for the next FY as per the MoF's projection.
The initial aggregate tax revenue collection projection might be set at Tk 1.49 trillion. The tax revenue collection target for the current FY was set at Tk 1.36 trillion, which was later revised downward to Tk 1.25 trillion.
Sources said the budget outline for the FY 2014-15 was prepared in line with the instruction of the Finance Minister and it might see changes based on discussions with stakeholders.
However, economists and experts termed the planned GDP growth projection of 7.3 per cent 'ambitious' and 'challenging.'
They suggested setting the growth target in the economic context of the country.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute of Bangladesh (PRI), said it would be 'highly ambitious' to set the growth target at that high for the next FY as political uncertainty might prevail further.
"A consensus among the political parties is needed to earn investors' confidence," he said.
"The GDP growth might reach around 6.0 per cent but it would be difficult to achieve 7.0 per cent," he added.
He saw political and economic management important to accelerate the growth.
Dr Mustafa K Mujeri, Director General of Bangladesh Institute of Development Studies (BIDS), said in the sixth five-year plan the country projected the GDP growth rate at 8.0 per cent for the FY 2014-15.
"It is not ambitious, if we look at the sixth five-year plan, but achieving the target will be difficult unless the government intensifies efforts to boost investments," he said.
The growth in investment should be accelerated for achieving any growth in GDP, he added. The GDP growth might remain around 6.0 per cent in the current fiscal, he predicted.
A substantial break with the current economic trend would be needed to push up the major economic indicators for a higher GDP growth rate, he added.
Govt weighing 7.3pc GDP growth target in FY ‘15
Doulot Akter Mala | Published: March 15, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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