Marginal fall in economic growth rate last fiscal

FE Team | Published: October 19, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Siddique Islam
The country's economy grew by 6.51 per cent in fiscal 2006-07, down from 6.63 per cent that was registered in the previous fiscal.
"The marginal decline in the growth rate was largely due to prolonged political uncertainty that prevailed in the first half of FY07," the central bank commented in its quarterly reports for January-March and April-June 2007, published recently.
The country's overall economy recorded an average 6.0 per cent growth over the past three years.
"Gross domestic product (GDP) growth is forecast at 6.50 per cent in FY08, lowered slightly from the Asian Development Outlook (ADO) projection because of recent floods, which have fortunately been less severe than those in recent years," the ADB says in a document. The ADO was projected the GDP growth at 7.0 per cent in FY08.
The Bangladesh Bank (BB) is hopeful of achieving 7.0 per cent GDP growth by the end of this fiscal.
"We are watching the overall economic situation after the devastating floods," a BB senior official told the FE Thursday, adding that the central bank is pursuing the GDP growth target set by the government earlier.
Sources, however, said the BB might be able to forecast the GDP growth rate in its next Monetary Policy statement, which is due for release in January next year.
The supply disruption of electricity, higher diesel price and short supply of fertiliser across the country led to a setback in agricultural production, according to the quarterly.
The growth in the agricultural sector was 3.18 per cent in the last fiscal compared to 4.94 per cent in the previous fiscal.
However, the growth in the manufacturing sector, led by exports, appears to be continuing by almost same pace during the third and fourth quarters of FY07 as in last fiscal.
"Overall industrial growth was broadly led by both domestic and buoyant external demand and therefore, no significant adjustment appears necessary for the industrial sector growth," the quarterly noted.
Service sector recorded a growth of 6.74 per cent mainly propelled by buoyant growth in telecommunications services and also by hotels and restaurants, and the emergence of new private TV channels and networks.
On the other hand, total revenue and expenditure, as share of gross domestic product (GDP), stood at 10.12 per cent and 13.73 per cent respectively in FY07 compared to 10.53 per cent and 13.76 per cent respectively in FY06.
Due to higher expenditure against poor revenue collection during the period, the overall fiscal deficit as share of GDP reached 3.61 per cent in FY07 from 3.24 per cent in FY06, according to the official statistics.
"The increased expenditure during FY07 was due to higher current expenditure, rising by 16.45 per cent, accompanied by implementation of the remaining benefits of the national pay scale," the central bank observed.
Buoyant growth in the flow of workers' remittances and moderately strong export growth led to a current surplus of US$952 million in FY07, the reports added.
The country received $5.98 billion worth of remittances during the last fiscal against $4.80 billion in the fiscal 2005-06. The amount is 24.52 per cent higher than that of the previous fiscal.
The flow of remittance in FY07 was a continuation of the trend of last fiscal when it was recorded at $4.80 billion. The growth in FY06 was 24.89 per cent over the previous fiscal.
The overall balance of payments showed a larger surplus of $1.493 billion during FY07 against the surplus of $338 million in the previous fiscal mainly due to surplus in current account balance and financial account of $952 million and $721 million respectively.