Key govt body projects 6pc growth on upward investment, remittance
Sunday, 4 October 2009
Nazmul Ahsan
A key government expert body has revised the country's economic growth for the current fiscal year to six per cent as the main economic indicators see green shoots of recovery.
The government had projected the economy to grow at 5.5 per cent in the budget in June when the globe was still mired in the worst economic recession since the Second World War.
But the government's Resources Committee manned by top officials and experts of the finance ministry, the national board of revenue and the Bangladesh Bank has this week revised the growth estimate banking on upswing in investment, remittance and exports.
"Our growth projection in the budget was conservative," a top finance ministry official said.
"But in the past few months we see signs of recovery both in the world and at home. Investment is going upward, remittance is still growing strong and exports show some signs of rebound," he said.
The resources committee said gross private investment would now hit Tk1319.70 billion, up from the previous estimate of Tk1268 billion, as entrepreneurs ramp up production eyeing a turnaround in global economy.
Experts have said a sliding interest rate will spur credit to the private sector in the latter half of the fiscal year when they expect the world economy to return to the pre-recession stage.
The committee sees remittance to hit a record $US11.6 billion in the year to June, although the number of people going abroad with jobs has fallen by 38 per cent in the first nine months of the fiscal.
BB officials said fall in overseas jobs would not affect the overall flow of remittance, which is growing at around 20 per cent bolstered by all time high figures in 2007 and 2008.
In the two years, Bangladesh has sent more than 1.6 million people abroad with most keeping their jobs despite the global recession.
Although exports have slumped in July by 6.8 per cent, the August figures show shipments returning to the positive territory, according to the provisional estimates of the Export Promotion Bureau (EPB).
The country's leading export groups have said they have witnessed increased orders from global buyers in recent months, as top retailers scale up their apparel purchase.
The resources committee also revised inflation to 6.2 per cent for the current fiscal, down from 6.5 per cent projected in the budget and by the central bank.
Zaid Bakht, Research Director of Bangladesh Institute of Development Studies, said achieving a six per cent growth rate is possible provided the government spends efficiently and fixes power and infrastructure problems.
"Private investment is still not up to the expectation due to the acute power crisis and crumbling infrastructure," he said.
"In addition, the government's development expenditure has in the past few years fallen short of target. If the government fails to implement the Annual Development Programme efficiently, there is no way we will see robust growth," he added.
A key government expert body has revised the country's economic growth for the current fiscal year to six per cent as the main economic indicators see green shoots of recovery.
The government had projected the economy to grow at 5.5 per cent in the budget in June when the globe was still mired in the worst economic recession since the Second World War.
But the government's Resources Committee manned by top officials and experts of the finance ministry, the national board of revenue and the Bangladesh Bank has this week revised the growth estimate banking on upswing in investment, remittance and exports.
"Our growth projection in the budget was conservative," a top finance ministry official said.
"But in the past few months we see signs of recovery both in the world and at home. Investment is going upward, remittance is still growing strong and exports show some signs of rebound," he said.
The resources committee said gross private investment would now hit Tk1319.70 billion, up from the previous estimate of Tk1268 billion, as entrepreneurs ramp up production eyeing a turnaround in global economy.
Experts have said a sliding interest rate will spur credit to the private sector in the latter half of the fiscal year when they expect the world economy to return to the pre-recession stage.
The committee sees remittance to hit a record $US11.6 billion in the year to June, although the number of people going abroad with jobs has fallen by 38 per cent in the first nine months of the fiscal.
BB officials said fall in overseas jobs would not affect the overall flow of remittance, which is growing at around 20 per cent bolstered by all time high figures in 2007 and 2008.
In the two years, Bangladesh has sent more than 1.6 million people abroad with most keeping their jobs despite the global recession.
Although exports have slumped in July by 6.8 per cent, the August figures show shipments returning to the positive territory, according to the provisional estimates of the Export Promotion Bureau (EPB).
The country's leading export groups have said they have witnessed increased orders from global buyers in recent months, as top retailers scale up their apparel purchase.
The resources committee also revised inflation to 6.2 per cent for the current fiscal, down from 6.5 per cent projected in the budget and by the central bank.
Zaid Bakht, Research Director of Bangladesh Institute of Development Studies, said achieving a six per cent growth rate is possible provided the government spends efficiently and fixes power and infrastructure problems.
"Private investment is still not up to the expectation due to the acute power crisis and crumbling infrastructure," he said.
"In addition, the government's development expenditure has in the past few years fallen short of target. If the government fails to implement the Annual Development Programme efficiently, there is no way we will see robust growth," he added.