Retail sales in the country reached US$ 12 billion during the last two Eid festivals driven by strong domestic demand and consumption, according to a World Bank estimate.
The international lending agency on Tuesday gave the estimate while releasing its latest Bangladesh Development Update-October, 2014 at its Dhaka office.WB also projected that Bangladesh economy would grow by 6.2 per cent in the current fiscal year of 2014-15, slightly up from 6.1 per cent growth in last year.
At the programme, WB country director for Bangladesh and Nepal Zohannes Zutt said that Bangladesh and WB were involved in a discussion on probable policy and institutional reforms as a condition to provide budgetary support to Bangladesh.
‘A total of US$ 10 billion to US$ 12 billion transacted in domestic retail market during the last two Eid festivals because of a rise in domestic demand and consumer confidence,’ World Bank Bangladesh lead economist Zahid Hussain said at a press briefing.
He said that domestic demand and consumption growth got a boost from rebound remittance inflows to the country and implementation of new wages in the readymade garment industry.
‘Bangladesh may achieve 6.2 per cent GDP growth in FY 2014-15 depending on political stability, strong domestic demand and revival in private investment,’ Zahid said.
Growth in agriculture, however, may decline by 1.3 percentage points to 2 per cent in the current fiscal year from 3.3 per cent in last year.
He said that achieving GDP growth at 7.3 per cent, the target set by the government for the current fiscal year, would not be possible because of poor investment climate and lack of infrastructure facility needed to achieve growth at higher rate.
‘Bangladesh now needs an investment boom to achieve GDP growth at 8 per cent by next 3-4 years,’ he said.
For required investment boom, Bangladesh will have to implement some immediate agenda including speedy completion of mega projects such as Dhaka-Chittagong highway, Padma bridge, metro rail and big power plants, establishment of proposed special economic zones, enactment of public-private partnership act, improving quality of public investment and implementation of remaining compliance reforms in readymade garment sector, he said.
Bangladesh also needs to increase its investment rate to at least 33 per cent to 35 per cent from current 28.7 per cent for such investment boom, he added.
The WB indentified some challenges including maintaining political stability, structural reforms, and progress in compliance in RMG sector, and inability to reopen job opportunities in Middle-East for sustaining GDP growth.
‘A resurgence of political unrest could depress private investment, push up inflation and put foreign reserves under pressure,’ it said.
It also projected that growth in agriculture and export earnings, however, would decrease while growth in industry and services sectors would increase in the year.
Alhough flood situation this year prolonged than last year, the crop production outlook is still very positive, it said.
According to the report, growth in industry and services will increase by 9.5 per cent and 6.1 per cent respectively in the current fiscal year. In last year, industry and services grew by 8.4 per cent and 5.8 per cent respectively.
Growth in export earnings may fall slightly mainly because of decrease in export to US market, stumbling world economy and projected slow GDP growth in developed countries, Zahid said.
Replying to a question, he said that world economy, particularly in countries where Bangladesh export RMG items was not in situation for increasing prices of apparel products.
‘If the price is increased that may decrease the overall export volume resulting in a fall in export earnings,’ he said.
At the briefing, another lead economist of WB bank Dhaka office Salman Zaidi, communications officer Mehrin A Mahbub, among others, were present.
-With New Age input
