Finds current account balance, customs revenue poor
Asif Showkat
A finance ministry technical committee dealing with the shocks from the global economic meltdown in its second meeting on Thursday expressed satisfaction with the country’s economic indicators except the current account balance and customs revenue.
The technical committee of the coordination council on monetary and exchange rate policy recommended forming a high-power executive committee to deal with the global economic recession.
It also forecast that the economy would remain stable until March as inward remittance and export data showed an increasing trend.
‘The technical committee has analysed the current global economic situation and identified the ways how the fallout can take its toll on the country’s financial and economic situation,’ said a senior official of finance ministry on Thursday after the meeting at the secretariat. Finance secretary Mohammad Tareq presided over the meeting.
The official said the country’s current account balance stood at a negative figure in October due to an increased import growth.
The official further said the collection of custom duties had declined and as a result the total revenue earning by the National Board of Revenue was also on the wane.
‘We will not worry about our economy till March as the growth of both inward remittance and export is showing an increasing trend,’ the official added. The committee will also place recommendations to the coordination council to minimise the possible adverse effects of the global financial crisis on the country’s economy and its financial sector.
The country’s overall balance of payments continued to maintain a surplus position during the current fiscal year, despite a deficit in the current account balance posted in October.
The overall balance showed a surplus of $64 million in July-September, according to Bangladesh Bank data.
Although there was a robust growth of inward remittances, the current account balance showed a deficit of $280 million in October, compared to $89 million in the corresponding month in the last fiscal.
‘The country’s current account deficit will ease as commodity prices decline on the international market,’ said Mustafa Kamal Mujeri, chief economist of Bangladesh Bank.
He also said the country’s current account for the first three months of the current fiscal year was positive, however, the import payments and short-term expenditures of the country pulled down the current account balance to the negative zone in October.
‘If the current account remains in the negative zone for a long time there will certainly be a negative effect of it on the country’s BoP as well as the overall economy,’ Mustafa warned.
The country’s foreign exchange reserves stood at $5.38 billion on Thursday.
The value of imports in the first half of FY09 was $10.33 billion or 19.29 per cent higher than that in the corresponding period of FY08, according to a provisional estimate of the central bank.
Its export growth in July-November was 26 per cent, standing at $6.5 billion at end-November.
Besides, the inward remittance crossed $4.5-billion mark in the first half, registering a 31.15 per cent growth over the same period in FY08.
The revenue board in the first six months fell by Tk 47 billion, or eight per cent, short of its Tk 272.50-billion revenue-earning target, according to another provisional estimate. The NBR had gathered Tk 225.30 billion in January-December while the NBR chief said Tk 2.00 billion would be realised after legal proceedings in some cases were disposed of.
The chairmen of NBR and Securities and Exchange Commission, a Bangladesh Bank deputy governor, director general of the insurance directorate, a vice-chairman of Export Promotion Bureau, and additional secretary of the Economic Relations Division and a member of the Implementation, Monitoring and Evaluation Department are on the technical committee. The committee will sit once every fortnight to review the trends of economic indicators.
Courtesy: newagebd.com
