Muhith sets high GDP growth target of 7.2pcStaff Correspondent
The finance minister, AMA Muhith, projected an ambitious 7.2 per cent growth of the country’s gross domestic products in the proposed budget for the FY2012-13 although the government’s target to achieve 7 per cent growth in the outgoing fiscal year fell short of target.
Muhith in his budget speech on Thursday said that the GDP growth in 2012-13 would be 7.2 per cent and the growth would increase to 8 per cent by 2014-15.
The minister also ditched the Bangladesh Bureau of Statistics projection that the country’s GDP would grow by 6.3 per cent this fiscal year, instead of the 7 per cent growth projected by the government in the current budget.
‘In my opinion, the BBS estimate did not take into account a number of factors, like the bumper Boro harvest, surge in internal demand from the month of April, our remarkable achievement in power generation and improved ADP implementation,’ he said.
‘For all these reasons, I am confident that by the end of this month—the closing month of the current fiscal year—our GDP growth will stand in the neighbourhood of 7 per cent,’ he said.
Apart from BBS, the country’s leading economists and international lending agencies like the Asian Development Bank, the World Bank and International Monetary Fund also projected that the country’s GDP growth would be around 6-6.3 per cent this fiscal year and around 6 per cent next fiscal year because of the looming economic crisis in Europe and flagging private sector investment.
Muhith, however, said, ‘We have set our growth target at 7.2 per cent for FY2012-13 on the basis of our expectations that a satisfactory growth in trade and agriculture sectors will continue as the global economy turns around by 2013. There will be a consistent credit flow to the development sectors and, above all, deficits in power, energy and infrastructure will decrease gradually.’
The country’s GDP grew by 6.1 percent in 2009-10 and 6.7 per cent in 2010-2011.
The Centre for Policy Dialogue, an independent think-tank. last week said that adding an extra 1 per cent to GDP growth in FY 2012-2013 from 6.3 per cent this fiscal year would require a gallant feat given the current investment trends.
Muhith hoped that as the International Monetary Fund started to release tranches of $1 billion Extended Credit Facility, the development partners and potential investors would be more confident about Bangladesh.
‘Due to this, we are expecting a rise in foreign direct investment. It will also make the disbursement of foreign aid in the pipeline easier and increase project aid utilisation rate,’ he hoped.
Thus, implementation of annual development programme would gather momentum.
He said that the government had taken initiatives to increase sales of national savings certificates and repackage and rebrand the conventional diaspora bonds which would increase government revenue.
‘At the same time, this will not crowd out the private sector. The resulting fiscal and monetary space will be supportive in implementing development programmes of the government. This will accelerate private sector investment,’ he claimed.
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