The government has set a lower Gross Domestic Product (GDP) growth target in the next fiscal, backtracking from its earlier stand of forecasting ambitious economic expansion over the last few years.
It has set a target of 7.0 per cent economic growth in the next financial year (FY) 2015-16, a 1.3 percentage point lower than that in the Perspective Plan 2021, a 0.3 percentage point down from the 7.3 per cent target in the last FY2015 and a 0.2 percentage point lower than the previous fiscal's 7.2 per cent target.
In the outgoing financial year (FY) 2014-15, Bangladesh's economy has been estimated to grow at 6.51 per cent against the 7.3 per cent target and 6.06 per cent against 7.2 per cent target in the previous FY2014, government statistics said.
Earlier, the government faced criticism for targeting ambitious growth rate of over 7.0 per cent in the past few years despite its lower and stagnant growth achievements.
In the past few years, Bangladesh has failed to cross the 6.0 per cent economic growth trajectory.
International lending agencies World Bank, Asian Development Bank, International Monetary Fund, local think tanks -the Centre for Policy Dialogue and the Policy Research Institute-have opined that the government has fallen into the trap of 6.0 per cent growth trajectory.
The country's GDP growth is struggling after the FY2011 when growth picked up to 6.71 per cent. But it started to decline from the FY2012 to 6.3 per cent, in FY2013 to 6.03 per cent and in FY2014 to 6.06 per cent, BBS data showed.
Finance minister AMA Muhith in his budget speech highlighted Thursday some reasons behind the lower GDP growth achievement against the target of 7.3 per cent in the last FY2015.
He said: "You are aware that despite favourable macroeconomic situation and enhanced public investment, slow pace of private investment is largely responsible for hindering expected higher growth."
Amid the previous experiences, the finance minister has projected a lower growth target to 7.0 per cent in the next FY2016.
Mr Muhith in the budget speech said: "Industry and service sectors on the supply side and, consumer spending and public and private investment, on the demand side, will be the drivers of this growth. Moreover, efficient coordination between fiscal and monetary policies will help realise this goal."
"We have taken a range of steps in power, energy and communication sectors along with development of ports and economic zones to overcome this obstacle. These initiatives will sustain the economic momentum by accelerating aggregate demand", he said.
Mr Muhith said: "Pay rise in the public sector and strong remittance flows will hopefully increase consumer spending. Besides, on-going government initiatives for skill development and unhindered participation of women in the production process will enhance productivity and supply of labour thereby accelerating the pace of growth."
The government wants to achieve double-digit growth by 2021 for the sake of becoming a middle-income country and cut hunger to below 15 per cent by 2021.
kabirhumayan10@gmail.com
