Bangladesh Economy on Track to achieve 6% Growth

Dhaka, Bangladesh | January 04, 2010 by D-8 Secretariat

Bangladesh Central Bank Governor, Atiur Rahman, said Bangladesh’s economy is on track to achieve 6% growth in the 2009-10 fiscal year to June despite the global downturn

Bangladesh’s economy is on track to achieve six percent growth in the 2009-10 fiscal year to June despite the global downturn, central bank governor Atiur Rahman said on Thursday.

His projection is a touch more optimistic than forecasts by the Asian Development Bank and other finance agencies for Bangladesh’s gross domestic product (GDP) growth to slow to just over five percent. Atiur told reporters a strong inflow of remittances from 6 million expatriate workers and steady income from export of readymade garments helped to absorb the shocks.

“Despite perceived uncertainties during the year (2009) we hope things will be better during rest of the current fiscal year and we will achieve the expected growth,” Atiur said. He also cited good crops and the priority the government added to farming as well as small and medium industries but said the country had not made an anticipated breakthrough in attracting investment. Hopes for investment brightened after Prime Minister Sheikh Hasina took office in January 2009 following a democratic election that ended two years of rule by a military-backed interim government. But in July-October, net foreign direct investment dropped to $207 million from $402 million in the same period of last year.

Bangladesh Finance Minister, A.M.A Munith also said that Bangladesh is “almost out of the impact of the global economic recession” with every economic index looking positive. “In the outgoing year, our exports, imports of capital machineries were on the rise, foreign exchange reserves and remittance were also satisfactory. In fact, we are almost out of the impact of global economic recession,” he said.

Maintaining that each economic index of the country is now positive, Muhith, however, admitted that there were some problems related to both domestic and foreign investment.

Atiur said he was hopeful the government would attach even more priority to smaller but flourishing sectors of the economy. He said reducing poverty that still grips more than 40 percent of Bangladesh’s 150 million people would remain a major challenge along with efforts to speed up and widen development, including infrastructure and energy. Power shortages have prevented new businesses from starting production and often threatened to close existing industries. Hasina was expected to sign a deal during her visit to India next month to import 500 megawatts of power from there.

Bangladesh is also looking to buy electricity from Myanmar and maybe Nepal as well as soon as possible, government officials have said. Atiur said the central bank would announce its monetary policy in January to control inflation, which is rising after hitting a 90-month low of 2.3 percent in June 2009. Annual inflation jumped to 6.71 percent in October from 4.60 percent the previous month mostly because of a steep rise in food costs, government data showed.

Bangladesh leading newspaper, The Daily Star, in a look-back at 2009, credited the economic recovery to the performance of the farmers, workers and the migrant workers abroad who send remittances back home. “Kudos goes to farmers, workers and migrant labourers this year. Without them, Bangladesh could face different music in the year that rolled by.”

Good agricultural production supported by sufficient injection of farm credit boosted domestic demand. A surprising spurt in remittance flow by a dwindling number of migrant workers also helped the cause. And garment workers chipped in with cheap labour to keep the country’s apparels floating in harsh times, the newspaper said.

News Source: Reuters, the Daily Star, D-8 Media.

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