Achieving 7.2 percent economic growth in the next fiscal year is possible if three criteria are met, Akbar Ali Khan, a former caretaker government adviser, said yesterday.
Bangladesh will achieve the GDP growth target if: there is no natural disaster, global fuel prices fall at least 20 percent and the fiscal and monetary policies are managed prudently, Khan said.
Khan’s optimistic remark comes at a time when many economists were sceptical of the high economic growth target.
Addressing a discussion on the proposed budget organised by the Bangla-language newspaper Prothom Alo, Khan said the economic growth will not be in a linear fashion.
“There may be ups and downs, but there should be reasons for them though.”
He is not too supportive of the government’s expansionary fiscal policy on the grounds that exchange rate would shoot up giving way to a higher inflation, which, in turn, would create uncertainty in the economy and have a negative impact on investment and sustainable development.
On the government’s recent agreement with the International Monetary Fund (IMF), Khan is doubtful of whether the targeted economic growth could be achieved or inflation could be controlled.
“But the government should still fulfil the promises it has made to the IMF to get assistance. Otherwise, it will create a big problem for the economy,” he said.
Dependency on fuel import is another big predicament for the economy and the government should take a measured approach over it, he added.
Dr Binayak Sen, a research director of Bangladesh Institute of Development Studies (BIDS), said the 7.2 percent GDP growth mostly depends on private sector growth.
“There is no connection between the economic growth and other components such as investment and export growth prediction.”
A big portion of the annual development programme remains unimplemen-ted every day, Sen said.
“If the central government cannot implement it, then it should be passed on to the local government. ADP implementation through local government will also increase government’s popularity,” he said.
Mustafizur Rahman, executive director of Centre for Policy Dialogue, said if the government wants to achieve a higher economic growth, it needs to bring out more reforms.
“We have seen the first generation reforms such as privatisation, and now it is time for second generation ones such as demutualisation in the capital market and formulation of financial reporting act,” he said.
“The proposed budget mentioned 1,027 projects, of which only 35 are new, while the rest of them are the projects that have been either carried over or need to be conducted in the next fiscal year,” he cited.
From a political viewpoint, implementation of next fiscal year’s budget would be vital for the government itself, he added.