Planning minister trashes CPD questions about GDP

Planning Minister AHM Mustafa Kamal Monday dismissed the questions raised about the government's GDP growth estimates for the outgoing fiscal (2013-14) claiming that all areas of the economy including the service sector have expanded adequately during the fiscal despite political troubles.
"The CPD has made its observations based on mere assumptions and it does not have the information I have. Assumptions and statistical data are not the same. There could be many types of analysis based on assumptions, but the reality is different," Mr Kamal said.
He said despite the negative impact of political violence on the economy in the first half of the fiscal 2014, the country's service, agriculture and manufacturing sectors have expanded properly.
"Due to political turmoil, the GDP growth has come down to 6.12 per cent from the original target. But had the political situation been stable, the growth could be 7.2 per cent,"  the planning minister told journalists after his meeting with the Asian Development Bank's (ADB) Country Director in Bangladesh Kazuhiko Higuchi at his office.
If the CPD takes into consideration the data and information of the Bangladesh Bureau of Statistics (BBS) and makes their proper analysis, its stance would prove wrong, Mr Kamal said.
The local think-tank questioned Sunday the BBS-estimated GDP growth for the outgoing FY2014 and said Bangladesh's GDP cannot grow at such a high rate when the economy, especially its service sector, had suffered due to political turbulence during most part of the first half of the FY2014.
"Although political violence gripped the country in the first six months of the current fiscal, exports maintained a 19.96 per cent growth. The products for shipment have been transported to the Chittagong port properly. That means, the transport sector has not performed badly even in an odd situation," the planning minister said.
Besides, the number of motorised vehicles and their fares had increased, manual transports were used more in place of motorised ones, rickshaws during the strike period were higher in number, government employees received 20 per cent dearness allowances, and the fees and allowances in the banking sector were raised in the year. The GDP growth has not been affected, he claimed.
"If the CPD take into cognisance those things in its review, its doubt about the BBS' GDP growth projection will be over," he said.
When asked about the lower GDP projection by the donors, Mr Kamal said: "The ADB and the World Bank will not raise questions at this moment. They had forecast Bangladesh's GDP growth six months back. Usually, the actual position is generally known in April-May period every year. So, I think the donors will not raise questions now about the BBS data."
The BBS' GDP growth calculation method is the best in the world which was even acknowledged by the ADB, the World Bank and the International Monetary Fund, the minister added.
About the grim investment picture, Mr Kamal said, "I don't think investment is not taking place since the export growth this fiscal has been healthy.
"Exports will increase to US$30 billion this fiscal from $27 billion last fiscal. How could exports rise if there was no investment?" he questioned.
When asked about the present political uncertainty, he said the political situation across the world including China, Korea and the Philippines is not good, but investment is taking place in those countries. "So, investment in Bangladesh will not be affected too."
About excess liquidity, Mr Kamal said banks are cautious on lending and, on the other hand, the aspirant borrowers are not taking loans due to higher interest rates. This has led to higher liquidity in the commercial banks.
About the ADB's support to Bangladesh, Mr Kamal said the development partner would extend its financial support to the extent of nearly $1.0 billion a year during the next five years.
ADB chief in Bangladesh Kazuhiko Higuchi said they would work with the government for development of the country.