Numbers point to a sluggish growth of economy

Syful Islam The latest statistics on the major macroeconomic indicators, available with the central bank, point to a sluggish economic growth during the current fiscal (2011-12). The monetary policy department of the Bangladesh Bank (BB) data shows that until December 12 of this fiscal, the government borrowing from the banking sector stood at Tk 168.48 billion against Tk 21.72 billion a year back. The current account balance during the July-September period this fiscal stood in the negative territory, at $372 million, which was $1.117 billion in surplus a year back. Statistics show that the foreign exchange reserve also declined substantially this fiscal. Until December 14 this year, the reserve was at $ 9.327 billion against $ 11.174 billion on December 30 last year. The hike in import payments also has put pressure on the economy. Letters of Credit (LCs) worth $11.753 billion were settled during the July-November period in this fiscal against $9.561 billion in same period last fiscal. The rate of inflation stood at 10.51 per cent in November this year against 8.14 per cent in November 2010. The rate of inflation on point-to-point basis stood at 11.58 per cent in November 2011 against 7.54 per cent in November last year. The public sector credit at the end of October 2011 stood at Tk 1052.68 billion against Tk 702.30 billion in same period last year. The net credit to the government sector stood at Tk 878.03 billion at the end of October 2011 against Tk 542.03 billion in same period last year. The credit to the public sector at the end of October 2011 increased by Tk 14.65 billion over the year. Private sector credit increased by Tk 630.63 billion and stood at Tk 3569.19 billion at the end of October this year against Tk 2938.56 billion a year back. The bank credit at the end of October this year stood at Tk 3615.95 billion against Tk 2997.32 billion at the end of November last year. The bank deposits at the end of October 2011 stood at Tk 4018.31 billion against Tk 3366.08 billion a year back. The broad money (M2) at the end of October 2011 stood at Tk 4613.04 billion against Tk 385 2.31 billion at the same period last year. The reserve money including the foreign currency clearing account at the end of October this year stood at Tk 985.25 billion against Tk 855.37 billion in the same period a year back. However, the export earning during the July-November period this fiscal increased slightly and stood at $9.709 billion against $8.275 billion in the same period last fiscal. The revenue earning from the national board of revenue (NBR) portion also saw a slight improvement during the July-October period this fiscal. During the period revenue worth Tk 249.19 billion was colleted against Tk 213.76 billion a year back. The Finance Minister has expressed his concern about the achievement of the projected economic growth as investment in the country has remained below 24 per cent of the gross domestic product (GDP) for a decade. The private sector has reacted sharply this week as it believes the government's excessive borrowing from the banking sector is leaving a 'crowding-out' effect on the economic activities, including new investment.