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Saturday, June 10, 2023

Bangladesh expects 7.2% GDP growth despite economic slowdown

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The gross domestic product (GDP) growth target has been fixed at 7.2 per cent in the proposed national budget of 2021-22.

Finance Minister AHM Mustafa Kamal revealed the GDP growth target for the upcoming fiscal while placing the proposed national budget of Tk 6,03,681 crore, which is 17.5 per cent of the GDP.

He said the GDP growth rate was originally estimated to be 8.20 per cent for the current fiscal of 2020-2021 on the assumptions that the economy would recover from the impact of the coronavirus pandemic.

“But the economic activities slowed down and the expected momentum in import and export activities did not take place due to the continuation of the impact of the pandemic and the surge of its second wave and resulting lockdowns in various countries in the world including Bangladesh,” he added.

Mustafa Kamal further said, “Considering the better-than-expected growth in remittances and the implementation of the large stimulus packages by the government to facilitate economic recovery, the GDP growth rate has been revised at 6.1 per cent for the current fiscal year.

Alongside, the Finance Minister said the growth rate for the upcoming fiscal of 2021-2022 has been fixed at 7.2 per cent in consistent with the government’s long-term plan and taking the post-Covid recovery situation into account. It is expected that the inflation rate will be 5.3 percent during the period, he said.

According to the Finance Minister, strong domestic demand will be the main source of growth in the medium-term.

“Our focuses will be on increasing consumption and investment to stimulate domestic demand and enhancing exports to augment external demand. Growth in remittances will also continue in the medium-term. Our aim is to develop improved transport structure and ensure power and energy security through public investment. On the other hand, acceleration of the GDP growth and creation of employment by increasing the supply side growth of the industrial sector are among our main targets. We hope that these targets will be achieved through the rapid implementation of the works to establish Economic Zones,” he said.

Mustafa Kamal said: “We are presenting the budget of FY2021-2022 against the backdrop of global crisis stemmed from the ongoing COVID-19 pandemic where countries around the world are battling with second and third waves. The epicenter of the pandemic has recently shifted towards Asia, particularly to South Asia region that is also impacting Bangladesh.

He said, it is very encouraging that both International Monetary Fund (IMF) and the World Bank has upgraded economic growth forecast for Bangladesh compared to their previous forecasts.

Quoting the International Monetary Fund (IMF) and the World Bank, he said global economy will grow by 6 per cent in real term in 2021 and 4.4 per cent in 2022. Whereas, their forecast for Bangladesh is was 5 per cent in 2021 and 7.5 per cent in 2022. The World Bank forecasts global GDP growth at 4 per cent and Bangladesh’s at 3.6 per cent in FY2020-2021, and also forecasts Bangladesh’s GDP growth at 5.1 per cent for FY2021-2022.

The Asian Development Bank has forecasted Bangladesh economy to grow by 5.5 to 6.0 per cent in FY2020-2021 and 7.2 per cent in 2021-2022. “In spite of the pandemic, the government of Bangladesh, led by the able leadership of the Hon’ble Prime Minister Sheikh Hasina, has been able to maintain the macroeconomic stability of the economy with prudent fiscal policy and accommodative monetary policy. In the last fiscal year, we have been able to achieve the real GDP growth of 5.2 percent which is highest in Asia.

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