BB sees 7.1pc GDP growth this fiscal

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The Bangladesh Bank (BB) yesterday forecast an overwhelming 7.1 percent growth in the gross domestic product (GDP) for the current fiscal against the donor agencies’ 6 percent projection considering pre-election political unrest.

Defending the higher growth fixation, the central bank consultant Syed M Ahsan said they forecast such higher rate mainly due to well performances by the industrial and agriculture sectors.

However, he said the projected growth could not be achieved if hartals, strikes and power shortage continue in future.

Earlier, the Asian Development Bank in its Quarterly Economic Update for Bangladesh, released in September 2006, said the GDP growth rate may stand at 6 percent during the FY07 as the country is facing several problems including pre-election political disruption, power shortage and infrastructure constraints.

“It is seen that the aggregate GDP growth projection for the current FY07 is in the range between 6.6 percent and 7.1 percent,” stated the central bank’s Monetary Policy Review released yesterday. The BB’s Policy Analysis Unit prepared the review.

According to the BB consultant, the central bank last fiscal projected a growth rate of 6.3 to 6.8 percent, which was near to the provisional estimate of Bangladesh Bureau of Statistics of 6.7 percent.

The central bank review also recommended further raise in petroleum price even if it remains unchanged in the international market. It observed that the hike might help stop petroleum smuggling to India.

“The government should increase the petroleum price as soon as possible,” the BB consultant said replying to a query.

The review said the pricing issue assumes even greater importance due to the continuing accumulation of debts of Bangladesh Petroleum Corporation and the other state-owned enterprises, which are not only jeopardising their financial solvency but also making the lending commercial banks (mainly the nationalised commercial banks) vulnerable.

The review projected that the industrial sector is likely to grow in between 9.5 and 10.5 percent, service sector in between 6.6 and 6.8 percent and the agriculture sector is likely to yield 2.8 to 3.4 percent growth rate during the current fiscal.

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