The Asian Development Bank (ADB) has said Bangladesh needs to raise investment to 34.3 percent of GDP if the government’s growth target for 2014-15 is to be achieved.
“The government’s FY2015 budget target growth is 7.3 percent. Attaining it will require increasing total investment to 34.3 percent of GDP, close to six percentage points higher than the current level,” the Manila-based agency said.
The assessment was published in ADB’s Bangladesh Quarterly Economic Update published on Wednesday.
The report said Bangladesh attained a GDP growth of 6.1 percent in 2013-14, slightly higher than the previous fiscal’s 6 percent.
ADB publishes this report every three months.
The target growth could not be reached due to political unrest ahead of the election, it said.
The government revised its growth target in 2013-14 from 7.2 percent down to 6.5 percent as political unrest hit the economy.
Growth in export earnings, public investment and agricultural growth had helped reach 6.1 percent growth in the last fiscal, the report said.
The Manila-based donor had earlier predicted that Bangladesh would achieve a growth rate of just about 5.6 percent because of the political turmoil.
Bangladesh needs to lift its annual GDP growth rate to about 8 percent in the medium term to alleviate poverty quickly, it said. Investment will need to rise to 37.6 percent of the GDP if that is to be attained.
In the last four years, the average GDP growth rate has been 6.3 percent. Under the sixth five-year plan, this should have been 7.1 percent.
The ADB has cautioned against inflation, saying year-on-year inflation went up from November to January of 2013-14 fiscal because of higher food prices due to supply disruptions during the political unrest before the elections.
“Food inflation continued the rising trend up to May from January 2014, because of higher retail rice prices during political unrest.
“Food inflation fell in June as new crops appeared on the market,” the report said.