The government has admitted the GDP annual growth target of 7.2 percent set in the current budget will not be possible to achieve.
Finance Minister AMA Muhith told Parliament on Monday the target has been revised to 6.5 percent for 2013-14 FY.
“It’s true that achieving 7.2 percent growth will not be possible because of the losses caused by the destructive activities in the three months before the polls,” Muhith said.
He said the revision of the growth target was done considering the ‘overall condition of the economy’.
The BNP and its allies had resorted to widespread — and often violent — agitation before the Jan 5 general election demanding a non-party dispensation to hold the polls.
But Prime Minister Sheikh Hasina’s government rejected their demand and went ahead with the elections.
Then the Awami League returned to power with ease for the second consecutive term.
While reporting progress on budget implementation, income and expenditure trend, and macroeconomic analysis for the July-Dec period, the finance minister said: “Attainment of our growth target will be hard as political unrest had negative impacts on different sectors.”
He, however, said he was not frustrated at the growth rate of the current year.
“Production indexes in industry, mineral and power sectors rose until September. Production of Aus (paddy) grew. Potential for rise in Boro production has been created as increased power generation will ensure uninterrupted electricity supply during irrigation session,” he said.
Muhith said credit flow to private sector, loan disbursement in agriculture, import of machinery and raw materials and export went up until December.
The World Bank had earlier forecast that Bangladesh’s growth would decline to 5.7 percent while the International Monetary Fund projected a 6 percent growth, which was similar to the central bank forecast.
The minister said he expected that the post-national election political stability and government’s support to entrepreneurs will encourage new investments.
Investment in private sector will play as a driving force in attainment of growth, he added.
Muhith said the world economy started recovering in late 2013. He referred to the latest IMF forecast that says the global economy would grow 3.7 percent and 3.9 percent in 2014 and 2015 respectively.
Inflation rate falls
The minister said in the report that strikes and blockades had badly hit the supply of commodity. “So prices of food in Bangladesh have not declined as expected. But I hope food prices will decrease in the days to come.”
He said the government was always trying to contain the inflation to a tolerable level.
“We’ve enough success in this regard. The point-to-point overall inflation in June last year was 8.05 percent. It declined to 7.5 percent in December.
Revenue collection
The minister said the government collected Tk 503.38 billion in revenues during the July-Dec period, a 12.2 percent rise over the same period in the past fiscal year.
He said exports rose 16.6 percent and imports 13.9 percent in the first six months of the current financial year.
Source: UNBConnect