Development analysts and economists have expressed their doubt about the achievement of more than 6.3 per cent economic growth in the current fiscal year (FY) as has recently been said by the finance minister.
Finance Minister AMA Muhith on January 20 told the media that despite a shortfall in the revenue collection and adverse impact of unrest on the economy over the past couple of months, the country's Gross Domestic Product (GDP) growth would not be less than 6.3 per cent.
The government had projected the GDP growth at 7.2 per cent for the current fiscal year 2013-14, which Bangladesh requires to become a middle-income country by 2021.
Differing with the finance minister's latest stance on GDP growth, economists and experts said it was hardly possible for the country to achieve such economic growth given the present macroeconomic scenario of Bangladesh.
Terming Muhith's 6.3 per cent growth forecast 'unrealistic', finance advisor to the last caretaker administration Dr Mirza Azizul Islam said the government's target of achieving more than 6.3 per cent economic growth in the current fiscal year was not possible.
"I don't see any good macroeconomic indicators which will facilitate achieving 6.3 per cent economic growth. Rather as per my own estimate, it will not be more than 5.5 per cent in the current FY," he told the FE.
He said he had considered the private and public consumptions and investments, and net foreign trade position. All this had not shown him any positive indication that could help in achieving more than 5.5 per cent GDP growth. Besides, the revenue income has fallen short, net foreign aid has shown negative trend, and foreign investment is unsatisfactory, Dr Islam said.
The country's revenue income has a shortfall of Tk 85.09 billion from the target in the first half of the current FY 2014, National Board of Revenue (NBR) data showed.
Economist Dr Ahsan H Mansur said he would be surprised if the economy is expanded at over 6.0 per cent rate in the current fiscal year. "I do not see any prospect of the economy growing beyond 5.5 per cent rate."
"Almost all the macroeconomic indicators are negative. How the country will achieve more than 6.0 per cent growth?" Mr Mansur, also the Executive Director of the Policy Research Institute (PRI), placed the question.
"All types of consumption have dropped, both private and public investments have decreased, net foreign trade is expected to be static like in the last fiscal year, the service and manufacturing sectors have also performed poorly due to the political turmoil in the country," he said.
"The remittance usually raises domestic consumptions. But remittance has recorded a negative growth in the last five months. Besides, the rural economy has also been affected badly due to the political turmoil. So, I don't see any prospect of achieving more than 6.3 per cent growth in the current fiscal," he added.
Prof Shamsul Alam, chief of the government's think tank General Economics Division (GED), however, is viewing the finance minister's projection as very reasonable as he says the GDP growth will be between 6.3 and 6.5 per cent in the current fiscal year.
"I am seeing a very good prospect of an economic rebound in the future days. Since the world economy is picking up, and the internal political situation has become normal, the GDP growth will not be less than 6.3 per cent," Prof Alam, member of the GED, said.
He, however, sees some challenges in the coming days in achieving the GDP growth.
If the political situation becomes volatile again, the monetary policy is not made prudently and revenue collection does not pick up, the economic growth could be affected, Prof Alam said.
Meanwhile, the foreign lenders and financial institutions like the World Bank, the International Monetary Fund and the Asian Development Bank have also projected the Bangladesh's prospective economic growth at below the 6.0 per cent mark.
The World Bank has forecast Bangladesh's GDP growth down at 5.7 per cent, the IMF at 5.5 per cent and the ADB at 5.8 per cent in their outlook for the FY 2013-14.
Bangladesh Bank in its quarterly review has recently predicted the economic growth at a rate between 5.7-6.0 per cent.
Bangladesh's economy expanded to 6.03 per cent rate in the last FY 2012-13.
Economists sceptical of economy reaching govt’s growth projection
FHM Humayan Kabir | Published: January 25, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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