Bangladesh foresees lesser GDP growth

Written by Agencies | Dhaka, February 27: | Updated: Feb 27 2008, 15:51pm hrs
The finance ministry in the emergency-ruled Bangladesh foresees the GDP growth to be one per cent lesser than it expected earlier attributing the phenomenon on natural disasters and massive anti-graft campaign, reports said in Dhaka on Wednesday.

The ministry now estimated that gross domestic product (GDP) will grow by six per cent, down from earlier official projection of seven per cent, a media report quoted officials as saying.

With all major economic indicators remaining in a slump, the country's economy would require two more years to see a seven per cent growth, the report said quoting the latest internal estimate of the finance ministry.

The report by the New Age newspaper came as Finance adviser of the interim cabinet Mirza Azizul Islam last week said that Bangladesh's economy was now under "tremendous strain" as global price hikes inflated import bills of essentials and enhanced the government's subsidy liabilities, bleeding state coffers dry.

Bangladesh Bank and global lenders already lowered their projections on the growth rate for the current fiscal to be ended on June 30.

A recent meeting of the ministry projected 6.7 per cent GDP growth for 2008-09 fiscal, seven per cent for 2009-10 and 7.2 per cent for 2010-11 fiscal year.

The GDP growth in the 2006-07 fiscal was 6.5 per cent.

The meeting observed that twin floods and cyclone Sidr in the first half of the current fiscal year dampened the overall economic growth prospects while officials in the meeting also "pointed the finger at the drives against corruption and tax evasion", said the report quoting officials familiar with the meeting.

International Monetary Fund (IMF) in October said the country's economic growth might slow down to 5.5 per cent in the current fiscal year due to impacts of anti-corruption drive and July-September flooding.

The Asian Development Bank earlier forecast 6.5 per cent growth and World Bank estimated that floods might decline economic growth by 0.20 per cent.

Bangladesh Bank governor Salehuddin Ahmed recently said GDP might see a slower-than-expected growth, but the decline would not be more than 0.50 per cent.

The sluggish economic trend has been reflected in the external trade figures as import growth largely outpaced export increment in first five months of the current fiscal year.

Components of import also add to the worries as food import bills alone accounted for one-fourth of the country's total trade deficit of over USD 2 billion.