The government has projected expansion of Bangladesh's manufacturing sector in the next fiscal year and a rise in its contribution to the Gross Domestic Product (GDP).
The assumptions came in the budget documents prepared for June 04 presentation in parliament.
The assumptions were made to support its growth projection of 7.0 per cent in the next fiscal.
But economists believe as long as political issues are not resolved, there will not be expected level of growth in the manufacturing sector. Its share at nearly 20 per cent now will remain static.
They said Bangladesh needs adequate private investment to expand the manufacturing sector significantly.
However, the government in its budget documents argued that the power situation has improved and it will help boost private sector investment.
It also said the government has been investing adequately in public health and education. As a result, skilled labour force will be created.
The government has assumed active labour force will contribute largely to help growth of the manufacturing sector.
Manufacturing sector's share was 20.17 per cent (provisional) in the current fiscal year. It was 19.45 per cent in 2013-14 fiscal.
However, the document did not elaborate whether its contribution will surpass the present level of 20 per cent.
It also assumed that the private sector credit would also grow at a decent rate in the next fiscal.
It also projected that remittance inflow would start picking up, thus providing a stimulus to the rural economy.
The government is hopeful of weather remaining favourable to help the agriculture sector.
But leading economists do not agree with the government's projections for the fiscal year 2015-16 saying those are not sufficient for a higher trajectory of growth.
They also found a number of assumptions not compatible with ground realities.
Dr AK Enamul Haque, a professor of economics at the East-West University, said the economy will grow once there is an annual investment equivalent to 5.0 per cent of the GDP.
He said, "Not only public investment, the private sector investment too is very important and combination of the both might take the economy to a higher growth path."
He asked, "Could we expect such level of investment in Bangladesh in a year?"
He said there is still uncertainty on the political front and as long as it does not end, private investment will not expand.
Dr Zaid Bakht, director (research) at the Bangladesh Institute of Development Studies (BIDS) said there was no political disturbance for more than one year but it does not mean there will be no political uncertainty in the country in the next months.
He said political uncertainty still persists although there is no disturbance.
He said political uncertainty is not visible. Yet it erodes investors' confidence fast.
He, however, said the government's assumption about favourable weather might prove correct as the country has been witnessing favourable weather over the past few years. "In my mind, projection of weather condition might come true," he said.
Dr. Ahsan H Mansur, executive director at the Policy Research Institute (PRI) said assumptions are nothing but expectations on the part of the government.
He said political uncertainty is likely to persist in the next fiscal as there is no move from the government side to remove it.
"As long as the causes of political uncertainty are not removed, the investors' confidence will not be restored," he opined.
jasimharoon@yahoo.com
Govt projects expansion of manufacturing sector
Jasim Uddin Haroon | Published: May 31, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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