The growth of share of the struggling industrial sector in the gross domestic product would decline in the current fiscal year reducing the GDP growth, said a local think-tank Unnayan Onneshan on Saturday. In the September issue of Bangladesh Economic Update, the UO predicted that the growth of manufacturing might decelerate further to 9.22 per cent in the financial year 2013-14 from 9.34 per cent in FY 2012-13.
The growth in manufacturing was 9.37 per cent in the FY 2011-12 and 9.45 per cent in 2010-11, it said.
‘If the current trend of sluggish industrial sector continues, share of the sector in the GDP in FY 2013-14 might increase by only 0.30 percentage point to 32.28 per cent from 31.33 per cent in 2012-13 whereas the sector’s share in GDP increased by 0.86 percentage point in FY 2012-13 from the previous financial year,’ it said.
‘Contractionary monetary policy, inadequate infrastructure, incompatible fiscal policy, unfavourable exchange and interest rates, loan scenario accompanied with some structural bottlenecks have affected the performance of the industrial sector,’ said UO.
It said that the government’s fiscal policy and central bank’s monetary policy along with the appreciated domestic currency and larger interest rate spread, which made the available fund costly, jointly affected the industrial sector.
Recent political developments and international actions have raised increasing burden on manufacturing sector, said the UO, adding that after the Rana Plaza collapse the manufacturing units, especially the readymade garment sector RMG had fallen in a precarious situation because of international pressure.
The UO said failed to catch up the technological advancement although it could have been a way forward in the manufacturing sector after all the odds.
It observed that less diversified market and product act as stumbling block for the progress of economy as 66 per cent of total export earning in FY 2012-13 was from only nine countries. ‘Only nine products contributed 93 per cent of total export earnings,’ it added.
-With New Age input
