Restoring the investors’ confidence and addressing the ever-increasing infrastructure demand in a cost-effective manner will be major challenges for the country’s economy in the upcoming fiscal, according to a report of the Centre for Policy Dialogue (CDP), a civil society think tank.
The report says the economy is somewhat stable, manifested in contained inflation, sustained exchange rates and high foreign exchange reserves, but structural weakness continue to persist, and the key challenge for fiscal 2015 is to translate microeconomic stability into an accelerated growth.
The report titled, ‘State of the Bangladesh Economy in Fiscal Year 2014’, was revealed at a media briefing at Brac Centre Inn in the capital on Sunday.
Disclosing the findings of the study, CPD executive director Prof Mustafizur Rahman said many of the concerns flagged by this report are medium to long-term ones in nature and will not be providing the benchmark of fiscal 2015, but will be shaping its outcomes.
He said the evolving situation may be addressed through institutional strengthening, targeted reform, good governance at all levels and by putting in place an inclusive and participatory political culture.
“If the participatory politics could be ensured and confidence of investors is restored, it’ll be possible to bring back pace in the economy,” Mustafizur Rahman said.
About the country’s microeconomic scenario, the report reveals that Bangladesh Bureau of Statistic (BBS) provisionally estimated the GDP growth to be 6.1 percent in fiscal 2014, which is 1.1 percent lower than the target of 7.2 percent set for fiscal 2014.
The growth rate in the industrial sector is estimated to come down to 8.4 percent in fiscal 2014 from 9.6 percent in fiscal 2013 while the agriculture sector is projected to achieve a much-improved performance — 3.4 percent in fiscal 2014. The service sector rate is estimated to be 5.8 percent in fiscal 2014 from 5.5 percent in fiscal 2013.
Prof Mustafizur Rahman said the provisional estimate of GDP for fiscal 2014 is expected to be revised at a later date based on data for the full fiscal year.
About public financing, the report says during the first 10 months of the fiscal 2014, the national Board of Revenue (NBR) attained 9.2 percent growth over the same period of fiscal 2013 (against the annual target of 25.3 percent). “NBR collection will need to grow at 34.4 percent in the last two months to attain the revised target,” the report said.
On making up budget deficit, it shows that 91 percent of the total deficit was financed from the domestic resources during the first three quarters of the current fiscal while the utilisation of foreign finances (in terms of both foreign grants and loan) were not encouraging.
Mustafizur Rahman said foreign aids should be used to cut budget deficit to reduce domestic burden.
About money-laundering, he said about US$ 1.5 billion is being siphoned off abroad each year. “The government should enforce the anti-money laundering act properly to check siphoned off money.”
The CPD in its report emphasised setting up of a task force to address the pending reform measures, including enactment of the Civil Service Act, enactment of capacities of agencies involved in implementation of major public investor projects and taking concrete initiatives towards promotion of a participatory and pluralistic democratic polity driven by inclusive and creditable national elections.
Source: UNBConnect