Revises GDP growth at 6.5pc in FY14
The government is going to compromise with the development budget as it has decided to cut the annual development programme by 16.5 per cent in the current fiscal year, officials said.
A meeting of the coordination council on the country’s macro-economy and budget took the decision on Thursday, they said. Presided over by finance minister AMA Muhith, the meeting, however, opted to cut the non-development expenses by only less half per cent and the overall budget of Tk 2,22,491 crore by 5 per cent.
The rate of inflation that was projected at 7 per cent will remain unchanged.
The big cut in ADP has been attributed to the growing revenue shortfall which is likely to hit more than Tk 13,000 crore at the end of the fiscal year.
The meeting decided to revise the growth rate of the gross domestic product at 6.5 per cent from originally 7.2 per cent despite cutting the ADP to Tk 55,000 crore from projected Tk 65,870 crore.
The meeting was told that the revised 6.5 per cent growth was likely as the economic activities were picking up after the January 5 general election.
It was also told that political unrest had not caused major adverse impact on the economy as apprehended by the country’s donors and development partners.
AMA Muhith admitted that the impact of the political unrest on the economy was not massive.
Talking to reporters after the meeting, he reiterated that the GDP growth would be no less than 6.3 per cent.
He said they would review the country’s overall economic situation again.
The next meeting of the committee is scheduled to take place next month.
The World Bank and the International Monetary Fund have already lowered the growth rate below 6 per cent due to disruption in economic activities during the controversial general election boycotted by major opposition.
Officials attending the meeting argued that donor agencies made the GDP forecast apprehending longer period of political unrest. But there was no political unrest after the general election that helped resumption of the economic activities in full swing.
They lauded export performance during the first-half of the current financial year which recorded US$ 14.68 billion with 16.56 per cent growth despite political unrest. Import was picking up, they said.
Former caretaker government adviser Mirza Azizul Islam said falling revenue was not the only negative indicator of the economy.
Falling investment was the other key concern, he said, adding that more than 6 per cent growth in the current fiscal year was unlikely.
-With New Age input
