Published: Monday, April 8, 2013

GDP growth may fall to 6-6.2pc

Bangladesh Bureau of Statistics and the central bank tell finance minister

The GDP growth in the current fiscal year may come down to 6-6.2 percent due to several negative factors both on the domestic and international fronts.
The Bangladesh Bureau of Statistics and the central bank came up with the projection at a meeting of the fiscal coordination council of the government chaired by Finance Minister AMA Muhith yesterday.
However, the finance ministry estimates the GDP (gross domestic product) growth at 6.6 percent though the rate was 6.3 percent in the previous fiscal year.
The government had a budgetary target of achieving 7.2 percent GDP growth in the current fiscal year.
The government will place its last budget in parliament in June.
As part of the budget preparation, the government’s fiscal coordination council and resource committee held meetings yesterday.
A finance ministry official said the meetings discussed the probable size of the next budget, GDP growth, inflation situation and financing of the Padma bridge project.
The statistics bureau said the GDP growth may range from 6.1 percent to 6.2 percent, while Bangladesh Bank said the rate may be 6-6.2 percent.
The GDP growth target for the next fiscal year could be set at 7.2 percent, the official said.
The government will not be able to reach the growth target at 7.2 percent this year, Muhith said at a pre-budget discussion with the secretaries at the National Economic Council auditorium yesterday.
However, the finance minister said the growth this year will be higher than that of last year.
He said the private sector credit shrank a little but the public investment increased much more than the previous year.
He said there is uncertainty in the domestic economy created by the ongoing political instability.
The European recession is prevailing and the US economy is yet to recover fully.
The EU and the US are the major export destinations for Bangladeshi products.
The finance minister said the government has directed the concerned agencies, including the BB and the National Board of Revenue, to take necessary steps to help industrialists, exporters and businesspeople minimise their losses from shutdowns.
The subsidy may be brought down to 2.3 percent of GDP in the current fiscal year, said officials who were present at the meetings.
In the current fiscal year’s budget, the allocation for subsidy in different sectors, including fertiliser and fuel, was more than Tk 37,000 crore.
The amount may come down to around Tk 24,000 crore, the officials said.
The government primarily raised the size of the next fiscal year’s budget by 19 percent over the original target of the current fiscal year and set it at Tk 223,760 crore.
Of the amount, the outlay for the annual development programme could be at Tk 65,600 crore.
In the next budget, the total revenue collection target has been set at Tk 167,460 crore, of which the amount of NBR revenue is Tk 136,000 crore.
However, NBR officials said the targets might not be achieved due to sluggish imports and the political turmoil. Budget deficit has been estimated at Tk 57,000 crore for the next fiscal year, the amount being 4.8 percent of GDP.
The finance ministry official said Muhith will meet the prime minister in a couple of days when the estimates will be finalised.
The next budget will be framed in line with the Sixth Five-Year Plan of the government, said Shamsul Alam, member (General Economic Division) of the planning ministry.