A local think tank Saturday has found fault with the government's projected economic growth for the current fiscal year, saying the investment over the past nine months does not support such expansion.
The Bangladesh Bureau of Statistics (BBS) has said the economy is poised to expand by 6.66 per cent --- the highest since mid 1970s - in the 2010-11 fiscal year, driven by high manufacturing growth and a recovery in farm output.
But the Centre for Policy Dialogue (CPD) said the GDP growth figure does not match with the reality because the country has witnessed a meagre investment growth in the current fiscal year.
"A marginal increase in investment from 24.4 per cent of GDP to 24.6 per cent cannot help GDP attain a 6.7 per cent growth," Dr Debapriya Bhattacharya, CPD's distinguished fellow, said.
"We can say this phenomenon as zero investment growth. And as a result, the growth should be either 6.2 or 6.3 per cent, not 6.7 per cent," Debapriya told a press conference.
He also said the government should not make the GDP growth rate as a political "score-sheet". "There is a need for independent scrutiny to ensure the credibility and transparency of national accounting system."
Debapriya said the government statistics should be transparent, but he added that weak estimate may provide a very different signal to the policy makers, resulting in inappropriate policy advice.
He, however, said the government's GDP projection for FY12 at 7.0 per cent needs at least 2.0-4.0 per cent additional investment.
"Attaining a seven per cent GDP growth target for FY12 will once again depend on continued good show by the farm sector and added contribution from the manufacturing sector, especially exports has to grow as good as last year," he said
Debapriya made the comments while presenting the CPD's annual report on the "State of the Bangladesh Economy" in FY2010-11. Its executive director, Mustafizur Rahman, and senior research associates also joined the press conference.
According to the CPD, inflation would remain a headache for the policy makers in the next fiscal. The think tank predicts the rate to be no less than 7.0 per cent.
The think tank said the government should take steps to implement the recommendations made by Khondker Ibrahim Khaled-led probe committee on the share market scam.
Debapriya was critical of the government's role in tackling the share market debacle in December-January. "Definitely, there was weakness on the part of the finance ministry," he said.
The economist also said the liquidity problem in the country's banking system will persist for some time and "it will create problems in the mid term for the investors."
About the central bank's monetary policy, he said it has no relation with the real picture of the economy. "Apparently, the Bangladesh Bank was ignoring non-compliance by the commercial banks before the crash of the capital market," he said.
The CPD suggested political parties make greater consensus on major contentious issues and stressed that political stability should be ensured at the first place for attaining sustainable economic growth.
Criticising the government's bloating subsidy bill on fuel imports, power and exports, Debapriya said such large-scale public expenditure is not "economically prudent".
The Bangladesh Bureau of Statistics (BBS) has said the economy is poised to expand by 6.66 per cent --- the highest since mid 1970s - in the 2010-11 fiscal year, driven by high manufacturing growth and a recovery in farm output.
But the Centre for Policy Dialogue (CPD) said the GDP growth figure does not match with the reality because the country has witnessed a meagre investment growth in the current fiscal year.
"A marginal increase in investment from 24.4 per cent of GDP to 24.6 per cent cannot help GDP attain a 6.7 per cent growth," Dr Debapriya Bhattacharya, CPD's distinguished fellow, said.
"We can say this phenomenon as zero investment growth. And as a result, the growth should be either 6.2 or 6.3 per cent, not 6.7 per cent," Debapriya told a press conference.
He also said the government should not make the GDP growth rate as a political "score-sheet". "There is a need for independent scrutiny to ensure the credibility and transparency of national accounting system."
Debapriya said the government statistics should be transparent, but he added that weak estimate may provide a very different signal to the policy makers, resulting in inappropriate policy advice.
He, however, said the government's GDP projection for FY12 at 7.0 per cent needs at least 2.0-4.0 per cent additional investment.
"Attaining a seven per cent GDP growth target for FY12 will once again depend on continued good show by the farm sector and added contribution from the manufacturing sector, especially exports has to grow as good as last year," he said
Debapriya made the comments while presenting the CPD's annual report on the "State of the Bangladesh Economy" in FY2010-11. Its executive director, Mustafizur Rahman, and senior research associates also joined the press conference.
According to the CPD, inflation would remain a headache for the policy makers in the next fiscal. The think tank predicts the rate to be no less than 7.0 per cent.
The think tank said the government should take steps to implement the recommendations made by Khondker Ibrahim Khaled-led probe committee on the share market scam.
Debapriya was critical of the government's role in tackling the share market debacle in December-January. "Definitely, there was weakness on the part of the finance ministry," he said.
The economist also said the liquidity problem in the country's banking system will persist for some time and "it will create problems in the mid term for the investors."
About the central bank's monetary policy, he said it has no relation with the real picture of the economy. "Apparently, the Bangladesh Bank was ignoring non-compliance by the commercial banks before the crash of the capital market," he said.
The CPD suggested political parties make greater consensus on major contentious issues and stressed that political stability should be ensured at the first place for attaining sustainable economic growth.
Criticising the government's bloating subsidy bill on fuel imports, power and exports, Debapriya said such large-scale public expenditure is not "economically prudent".
Comments
Post a Comment