ADB projects 6.7pc growth for FY16 [ Tritiyo Matra News ]

ADB projects 6.7pc growth for FY16

Local September 23, 2015

The government in its national budget, however, set a GDP growth at 7 per cent for the FY16.
In its Asian Development Outlook Update for 2015, the ADB said that the country would achieve the growth rate on brisk domestic demand, prudent macroeconomic stability, higher growth in export earnings and remittance inflows, public investment and a stable political environment.
The Manila-based multinational lender also expected that growth in agriculture, industry and services would also move up in the current fiscal year.
Inflation is also projected falling to 6.2 per cent in the year from 6.4 per cent last year, it said.
‘Bangladesh economy demonstrated commendable resilience over the past decade growing at an average of 6.2 per cent a year and now it is on a higher growth trajectory with a projected 6.7 per cent growth in the current fiscal year,’ ADB country director Kazuhiko Higuchi said while releasing the ADO at its Dhaka office.
Continued efforts are expected for resource mobilisation, structural reforms and upgrading infrastructure to continue the higher growth path and ensure inclusive growth, he said.
‘The ADB also expect stepped-up implementation of the annual development programme and pick-up in investment under the stable business climate,’ Kazuhiko said.
He said that major improvement in infrastructure including capacity of roadways, railways and other physical communications, and services was needed for ensuring growth at higher rate.
ADB’s principal country specialist and head of economic programme Mohammed Parvez Imdad said that export growth would be up to 6 per cent in the FY16, significantly up from 3.3 per cent last year, on strengthening economic growth in the eurozone and the United States.
‘Improvements in wages, working conditions and labour rights, and in building and safety standards will enhance buyers confidence which will boost exports,’ he said.
Bangladesh is also trying to expand its export markets and increase demand in existing markets, Imdad said.
Remittance inflows will also grow by 9 per cent in the year on the government efforts to send more workers abroad, he said.
The ADB projected higher import growth at 13 per cent for the year as import of capital goods and industrial raw materials will rise as industrial production will pick up. The imports grew by 11.2 per cent last year.
Agriculture production will grow by 3.2 per cent in the year, up from 3 per cent last year, according to the outlook.
‘Industry is expected to see 9.8 per cent growth in FY16, compared with 9.6 per cent in the FY15 with better performance in apparel exports, manufacturing for domestic market and construction,’ the outlook stated.
Services sector is also expected to grow by 6 per cent in the current fiscal year compared with that of 5.8 per cent last year, it said.
Imdad said that inflation would remain in check with easing of supply constraints, a cautious monetary policy of Bangladesh Bank and a better crop outlook though new pay scale for government employees and upward adjustments to domestic gas and electricity prices might exert some inflationary pressure.
The outlook said that several risks could derail the projections. Political stability is essential to gain the confidence of investors, maintain macroeconomic stability and higher economic growth, it said.