Published in The Observer on Saturday, 14 February 2015.
Govt revising economic indexes for political unrest
Mizanur Rahman
The economic indexes are being revised in the current fiscal year (2014-15) due to the blockade and shutdowns enforced by the BNP-led 20 party alliance from January 6.
“These indexes are the target of Gross Domestic Product (GDP), Inflation, Investment, Bank loan, Revenue Collection, Annual Development Programme (ADP) and Export-Import,” Planning Commission sources said.
“The ongoing political turmoil not only affects implementation of budget in the current fiscal year, but also everything else in the country,” said Finance Minister AMA Muhith recently.
“Blockade and shutdowns are destroying the potentials of the country. The target of GDP will be reduced in the current FY due to the ongoing political unrest,” he added.
“Even in December, I was fully hopeful about reaching 7.2 per cent GDP growth in the current fiscal. But now I am highly doubtful about reaching the target,” he said, as the country remains blockade-bound for over a month in a row.
Asked whether the targeted GDP-growth rate would be lowered down due to the current political events, he said, “Yes, it needs revision. The budget and GDP-growth target may need to be revised.”
The Finance Minister said, “A report on budget implementation in the second quarter of the current fiscal year will be placed in a day or two in parliament. The overall budget affairs of current fiscal year will be reviewed then.”
A Planning Commission official said, “The Ministry of Finance had prepared a preliminary macroeconomic-projection report under government’s Medium-term Macroeconomic Framework (MTMF) for the next five years.”
A senior Finance Ministry official said, “As the economy is facing volatility, we are forced to cut down our earlier projection by 0.9 percentage points to 7.4 per cent for FY2016.”
Besides, they have proposed to project 7.5 and 7.7 per cent GDP growth targets in the subsequent FY2017 and FY2018 respectively under the trimmed MTMF.
“But it is not the final projection. The Finance Division, Planning Commission, General Economic Division, National Board of Revenue, Bangladesh Bank and other government agencies concerned are working together to detailing Bangladesh’s future economic outlook,” he said.
Kazi Akram Uddin Ahmed, President of the Federation of Chambers of Commerce and Industry (FBCCI), told The Daily Observer, “The country’s economy is being hugely damaged due to political turmoil.”
“The way of solution will be found out through effective discussion among the political parties for continuing the socio economic development and achieving the prosperity,” he added.
Planning Ministry sources said, slow project execution has prompted the Railway Ministry to already cut its development budget by nearly Tk 9.25 billion for the upcoming revised budget of the current financial year (FY) 2014-15.
The ministry has sent a proposal to the Planning Commission to revise downward its outlay in the upcoming revised ADP. Other ministries, sectors and divisions have also been asked to revise downward their respective outlay in the upcoming revised ADP.
In the current development budget, the government allocated Tk 45.26 billion for implementing 41 projects. Out of this, Tk 25.57 billion will come from the government exchequer and the rest Tk 19.69 billion from project aid to be mobilised from the external resources.
“At present the investment in private sector is 19 per cent of the GDP. This has to increase to 25 per cent if the target is to be achieved,” said Mustafizur Rahman, Executive Director of Centre for Policy Dialogue.