The government has missed the GDP growth target for last seven consecutive years because of its unrealistic approach in setting the growth target, said experts.
According to a provisional data, the GDP growth of the current year was 6.51 per cent which, however, was also questioned by the economists against the target of 7.3 per cent.
Planning minister AHM Mustafa Kamal recently blamed the political unrest, blockades, hartals and vandalism by BNP-led opposition parties for not achieving the GDP growth target of 7.3 per cent set for the year by the government.
‘GDP would grow by around 7 per cent in the year if there would not be political unrest and vandalism in some months of the year. But 6.51 per cent is not also bad,’ he said while announcing the provisional GDP data two weeks back.
Like previous five years, economists termed the 7.3 per cent GDP target unrealistic when the finance minister AMA Muhith had announced the budget for the current FY 2014-15 in June last year.
As the government claimed GDP growth 6.51 per cent for this fiscal year, economists also questioned such figure saying is was realistic as the country’s economy faced a setback because of the intense political unrest in the second half of the fiscal year surrounding the controversial general elections in January 2014.
International lenders like World Bank in April downsized the GDP growth projection to 5.6 per cent for the current fiscal year due to the impact of political turmoil from its earlier forecast of 6.6 per cent.
The Asian Development Bank also cut its forecast to 6.1 per cent from its earlier projection of GDP growth at 6.4 per cent.
Finance ministry officials, however, said the government is planning to set the GDP growth target from 7 per cent to 7.5 per cent for the upcoming 2015-16 fiscal year.
Adviser to the former caretaker government Mirza Azizul Islam questioned the provisional GDP estimate and said targeting GDP growth at more than 7 per cent will be unrealistic.
‘The true scenario of the economy was not reflected in the provisional GDP growth estimate. I can guarantee that any GDP growth target higher than 7 per cent will not be achieved in the coming fiscal year,’ he said.
Former governor of Bangladesh Bank Saleh Uddin Ahmed said that any GDP target beyond 7 per cent would be illogical, saying, ‘Sluggish investment, political uncertainty and inefficiency of the work process are not some issues that we can solve overnight. So setting a higher target is completely illogical,’ he told New Age on Monday.
Saleh Uddin said the issues of transparency, accountability and governance are also equally important along with the economic concerns in achieving the GDP target.
Policy Research Institute of Bangladesh executive director Ahsan H Mansur said the government is consistently missing the GDP growth target because the target is too ambitious.
‘We have never achieved 7 per cent GDP growth. So achieving beyond that seems impossible considering the overall situation,’ he told New Age on Monday.
Ahsan said the government should focus on brining more investment in the economy.
‘The government should look for incremental growth. So increasing the investment is more practical than raising the growth target,’ he said.
The government set the GDP growth target at 7.3 in the 2013-14 fiscal year but the actual growth was 6.06 per cent.
The GDP growth hit a four-year low in the past 2012–13 financial year at 6.03 per cent against a target of 7.2 per cent.
In the 2011–12 financial year, the government targeted a 7.0 per cent growth while it finally achieved 6.23 per cent; in the 2010–11 financial year, it achieved a 6.71 per cent growth against a target of 6.8 per cent.
Source: New Age
