Projected growth to hit 7 percent

According to Bangladesh Bureau of Statistics' (BBS) provisional data, the economy is projected to grow at a rate exceeding 7 percent in the current fiscal. This is very good news and the government and the people should be complimented for it. We should, however, take into account the nagging problems that the economy faces to make the targets achievable. There is concern whether the growth target can be achieved in the current fiscal as tax collection, the principal means of revenue for the government remains below target. With the slowdown in the labour markets, particularly where Bangladeshi expatriate workers are concerned, the reduction in inward remittance is another factor that has to be taken into account.

An increase in per capita income does not necessarily mean a greater and equitable distribution of wealth for the greater populace. One must contend that there is greater disparity in incomes with each passing year and a large percentage of the populace linger below the poverty line. Indeed, the only sector that is showing optimistic growth is exports. There has been an expansion in the services, in large-scale manufacturing, construction and transport. 

For the economy to sustain the projected growth rate will require substantial increase in private investments, and this is perhaps where the major concern lies.  BBS data tells us that private investment to GDP ratio has actually declined from 22.07 percent to 21.78 percent in the current fiscal. Our focus should be towards removing the hurdles that hold up private sector investments, like addressing infrastructure bottlenecks and lowering lending rates. That would allow for the 7 percent growth rate to become sustainable over the long term.