Inflation revised at 7pc from earlier 9pc
Staff Correspondent
The government has decided to stick to the initial projection of the country’s gross domestic product (GDP) growth at 6.5 per cent in the current fiscal, despite negative forecast by a lending agency.
The decision for sticking to the initial projection, set by the immediate-past interim government, was taken at a recent meeting of the national coordination council on macro-economy and fiscal measures, finance ministry officials said on Monday.
The meeting also decided to lower the annual inflation rate to seven per cent from the earlier projection of nine per cent for the 2008-09(July08-June09).
World Bank, one of the country’s main lending agencies, forecast in last November that the Bangladesh’s economy would grow between 4.8 per cent and 5.4 per cent due to global economic downturn.
The coordination council meeting, headed by finance adviser AMA Muhith, however, found that the country’s economy would not face any major adverse impact from the worst global recession in the current fiscal, added the officials.
The officials said the country’s exports grew by 17 per cent in the first seven-month of the fiscal, despite negative speculations and the remittance flow was maintaining nearly 30 per cent growth during the same period.
Bangladesh Institute of Development Studies (BIDS) research director Zaid Bakth said the growth projection still remained a bit optimistic.
Low public investment, revenue shortfall and lower than expected private sector investment are among the negative indicators of the economy, which might face adverse impact from the global meltdown, he said.
Bakth said a conservative GDP growth estimate of six per cent looks attainable.
Bangladesh Bank also projected six per cent plus growth in the current fiscal.
Bakth, however, said there was no major natural calamity in the current fiscal, which was very positive as the country still depended on agriculture sector largely for its economic growth.
About the WB growth projection, he said its forecast on the country’s garment sector for quota-free period proved to be wrong.
The WB and the International Monetary Fund (IMF) were also sceptical about 6.2 per cent growth the country achieved last fiscal, despite two rounds of floods and a devastating cyclone in July-November period of 2007.
Apart from natural calamities, record price-hike of commodities, including fuel oil in the international market, pushed the country’s import cost higher putting additional pressure on the country’s balance of payment.
But powered by a bumper boro harvest last year and robust growth of export and remittance, the country overcame the losses caused by floods and the cyclone Sidr.
Courtesy: newagebd.com
