Muhith still expects minimum 6.3 pc GDP growth

Finance Minister AMA Muhith on Monday said the growth projection of the current fiscal year (2013-14) would be revised downwards from the targeted 7.2 percent as he thinks it would be 6.3 percent this time.

“The GDP growth projection for the current year would be revised as I expect it won’t be less than 6.3 percent this year,” he said.

The minister was talking to reporters at his ministry in the afternoon after a meeting with the chairmen and managing directors of state-owned banks, financial institutions and insurance companies. State Minister for Finance MA Mannan was also present.

Elaborating the cause for revising the growth target, Muhith said, “Our growth projection was too ambitious for this year as I based it on the performance of the last year.”

He also hinted that the national budget for the current fiscal year would also be revised downwards because the expectations over the achievements of the previous budget were a bit high.

The Finance Minister said the country’s average growth in the last five years remained steady with 6.2 percent, which is also one of the best performances of the world, if the petroleum-rich countries are left out.

“That’s our strength and it has taken our whole economy to a new height. There’s a need for a monster to push these backwards, but I don’t think it would happen in Bangladesh.”

Muhith also expressed his resolve that Bangladesh would reach such a height in the next five years where the country’s development would not be stopped by any means and it would turn into a middle-income country. “I’ve no personal doubt to this end.”

When referred to the recent World Bank projection of 5.7 percent growth for Bangladesh in FY 14, the Finance Minister said the World Bank and the International Monetary Fund (IMF) often make conservative observations and the government never tries to compare it with their projections.

“We’re expecting GDP growth to notch 6.3 percent in the current year as the performance of the last six months ensures that the growth would be 6.3 percent as violence has been controlled,” he said.

The Washington-based lending agency has recently forecast that the growth rate of Bangladesh would not cross 5.7 percent, essentially due to Bangladesh’s ongoing political turmoil.

In a half-yearly report, titled ‘Global Economic Prospects’ on Wednesday, the World Bank recorded this observation.

Asked what would be the major tasks of the government in the next six months, he said the work order for the main construction of the Padma Bridge project would be awarded by this time apart from formulation of the Insurance Policy, launching of the Rural Savings Bank, enactment of the Financial Reporting Act while the anti-corruption measures would be strengthened.

Criticising negative media reports about the capital market, Muhith said there has not been such strong and stable capital market in the past in Bangladesh like the present one following amendments to a number of laws. “In the last two years, the capital market has been stable…of course, there will be ups and downs, but landslide fall is another thing.”

Evaluating the whole economic scenario of the 1^st six months of the current fiscal year, he said the period was more or less good for the economy as there were good growth, exports have grown quite substantially alongside increased remittance inflows and foreign currency reserves while the imports have declined.

Noting that the country’s insurance sector is still the weakest as there had been no control in its 76 companies, the Finance Minister said this sector also involves looting and corruption.

“Some of the insurance companies are wicked and I’ve warned them that they have to pay heavily unless they become rationale, gentle and civilized, otherwise I’ll deal them with iron hand,” Muhith said.

At meeting, the Finance Minister said, he also directed the high ups of the banks, financial institutions and insurance companies to chalk out their five-year action plan as the programmes should have to be for five years, no matter the government stays in office for what period.