Continuous fall in growth in agriculture and industry sectors may cause a slowdown in GDP growth in the current fiscal year, said local think-tank Unnayan Onneshan on Saturday.
In its current issue of Bangladesh Economic Update on recent trends of growth in agriculture, industry and power, UO projected that GDP growth in the current fiscal year might fall below the decade average of 6 per cent which was 6.03 per cent in last year.
Bangladesh’s economy grew by 6.71 per cent in the FY 2010-2011 and fell to 6.23 per cent in the FY 2011-2012.
The organisation pointed out that the growth rate in agriculture had been declining over the last few years and it might reduce further to 2.09 per cent in the current FY 2013-2014.
Manufacturing sector may also experience a further decline in growth than the preceding years and it may grow by 6.02 per cent in this year down from 9.34 per cent in previous year, it said.
UO attributed to gradual loss of cultivable land, lack of invention, adoption and dissemination of new technology, and lack of sufficient support for agricultural research and extension for gradual declination trend in agriculture sector growth.
It also pointed out that unavailability of infrastructural facilities, recent hiccups in garment sector, constraints originating from limited size of the domestic market, instability in property rights led the gradual fall in growth in manufacturing sector.
Unnayan Onneshan detected that the underdevelopments in power sector had been exerting immense adverse impacts on the economy through hindering agricultural and industrial production and development.
Pointing to the frequent tariff hikes during the last five fiscal years, the UO states that entrepreneurs from agriculture and industry sectors had to face the challenge of cost-push in production due to
price hike of power because of government’s dependence on oil-based rental power plants.
In FY 2012-2013, total cost of generating one kilowatt-hour power by using gas was Tk. 2.59 while it cost Tk. 16.37 and Tk. 20.73 for the generation of same amount of power using furnace oil and diesel oil respectively.
The government needs to prioritise the development of power sector for providing a conducive-environment for investment and growth in the economy, UO suggested.
-With New Age input
