WB estimates economic growth downward to 5.9pc in FY '09
Friday, 22 January 2010
FE Report
The World Bank (WB) in its Global Economic Prospects (GEP) had estimated Bangladesh's economic growth downward to 5.9 per cent in FY 2009, saying that it would continue to slide to 5.5 per cent in FY 2010, from 6.2 per cent in FY 2008.
"Global economic recovery would slow later in 2010 as impact of fiscal stimulus begins to wane, which is probably the reason that economies have lower growth rates in 2010 followed by modest recovery in 2011," said the GEP released by the WB Thursday.
However, finance minister Abul Maal Abdul Muhith has rejected the WB report projecting a downward economic trend for Bangladesh for two consecutive years, according to bdnews4.com.
The news agency adds: a modest recovery in FY 2011, projected at 5.8 per cent, would still fall short of the government's targeted six per cent growth.
Muhith in his budget speech last June projected GDP growth between 5.5-6.0 per cent for FY 2010. Since then he has consistently held that growth would not dip below 6.0 per cent in this fiscal.
When asked about the WB's estimates for 2009 and projections for the following two years 2010 and 2011, the finance minister did not accept the projections of growth below six per cent. "I reject it," he told the news agency on Thursday.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, a Dhaka-based research organisation, told bdnews24.com that the trend since July 2009 suggested a growth between 5.5 per cent and 6 per cent.
"Of course one cannot tell whether it is going to be closer to 5.5 or 6 per cent."
Refraining from making any comment on the WB projections, he suggested that the estimation based on current trends was quite in line.
The GEP says the financial markets would still remain troubled while low household spending would mean a weak private sector and high joblessness.
The agency report notes that recovery will slow down later into the year when the economies will gradually have to fare on their own with little or no stimulus.
"Overall, after falling for two to three quarters, global GDP has begun recovering, and output is expected to grow rapidly during the remainder of 2009 and into the first half of 2010."
Global GDP is expected to grow 2.7 per cent in 2010, rising from 2.2 per cent in 2009. It is expected to reach 3.2 per cent in 2011.
Developing countries have a far better prospect of a faster recovery according to the report.
It projects 5.2 per cent growth this year followed by 5.8 per cent growth next year for developing countries.
But the GDP in rich countries, however, is expected to rise much more slowly - 1.8 per cent in 2010 and 2.3 per cent in 2011.
World trade volumes, which fell by a staggering 14.4 per cent in 2009, are projected to expand by 4.3 and 6.2 per cent this year and in 2011, said a release.
The GEP observes that this region appears to have escaped the worst impacts of the crisis. But the estimated 5.7 per cent growth last year, which was the same in the previous year, apparently signified a strong slowdown from the boom.
The reason is perhaps explained by falling investment in the region, according to the report.
The region's recovery does not present a starkly different picture compared to that of the rest of the world falling from 6.9 per cent in 2008 to 6 per cent in 2009, followed by 7 per cent and 7.4 per cent in 2010 and 2011.
But it should be pointed out that while the recovery of other economies of the region was modest, it was India's figures that lifted them up.
Falling from 9.1 per cent growth in 2007, Indian growth remained at a low of 6 per cent and 6.1 per cent for the following two years.
It is projected to shoot up to 7.5 per cent in 2010 and 8 per cent next year.
The World Bank (WB) in its Global Economic Prospects (GEP) had estimated Bangladesh's economic growth downward to 5.9 per cent in FY 2009, saying that it would continue to slide to 5.5 per cent in FY 2010, from 6.2 per cent in FY 2008.
"Global economic recovery would slow later in 2010 as impact of fiscal stimulus begins to wane, which is probably the reason that economies have lower growth rates in 2010 followed by modest recovery in 2011," said the GEP released by the WB Thursday.
However, finance minister Abul Maal Abdul Muhith has rejected the WB report projecting a downward economic trend for Bangladesh for two consecutive years, according to bdnews4.com.
The news agency adds: a modest recovery in FY 2011, projected at 5.8 per cent, would still fall short of the government's targeted six per cent growth.
Muhith in his budget speech last June projected GDP growth between 5.5-6.0 per cent for FY 2010. Since then he has consistently held that growth would not dip below 6.0 per cent in this fiscal.
When asked about the WB's estimates for 2009 and projections for the following two years 2010 and 2011, the finance minister did not accept the projections of growth below six per cent. "I reject it," he told the news agency on Thursday.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, a Dhaka-based research organisation, told bdnews24.com that the trend since July 2009 suggested a growth between 5.5 per cent and 6 per cent.
"Of course one cannot tell whether it is going to be closer to 5.5 or 6 per cent."
Refraining from making any comment on the WB projections, he suggested that the estimation based on current trends was quite in line.
The GEP says the financial markets would still remain troubled while low household spending would mean a weak private sector and high joblessness.
The agency report notes that recovery will slow down later into the year when the economies will gradually have to fare on their own with little or no stimulus.
"Overall, after falling for two to three quarters, global GDP has begun recovering, and output is expected to grow rapidly during the remainder of 2009 and into the first half of 2010."
Global GDP is expected to grow 2.7 per cent in 2010, rising from 2.2 per cent in 2009. It is expected to reach 3.2 per cent in 2011.
Developing countries have a far better prospect of a faster recovery according to the report.
It projects 5.2 per cent growth this year followed by 5.8 per cent growth next year for developing countries.
But the GDP in rich countries, however, is expected to rise much more slowly - 1.8 per cent in 2010 and 2.3 per cent in 2011.
World trade volumes, which fell by a staggering 14.4 per cent in 2009, are projected to expand by 4.3 and 6.2 per cent this year and in 2011, said a release.
The GEP observes that this region appears to have escaped the worst impacts of the crisis. But the estimated 5.7 per cent growth last year, which was the same in the previous year, apparently signified a strong slowdown from the boom.
The reason is perhaps explained by falling investment in the region, according to the report.
The region's recovery does not present a starkly different picture compared to that of the rest of the world falling from 6.9 per cent in 2008 to 6 per cent in 2009, followed by 7 per cent and 7.4 per cent in 2010 and 2011.
But it should be pointed out that while the recovery of other economies of the region was modest, it was India's figures that lifted them up.
Falling from 9.1 per cent growth in 2007, Indian growth remained at a low of 6 per cent and 6.1 per cent for the following two years.
It is projected to shoot up to 7.5 per cent in 2010 and 8 per cent next year.