The country's economy has done exceptionally well over the past two decades. In spite of varied impediments to growth, Bangladesh has come to the forefront of the developing world by performing well in most of the internationally accepted indicators of socio-economic progress, experts opine. They observe that the economy is progressing well but ensuring adequate infrastructure, gaining investor confidence and ensuring supply of required power and energy may further boost fresh investment and expedite the country's accelerated economic development.
BBS data suggest that the country's GDP growth in the present fiscal (FY19) is likely to be 8.13 per cent, up from 7.86 per cent in the past fiscal (FY18).
The multilateral lenders that previously downgraded the country's growth projection to below 7 per cent have raised their projection to between 7.3 per cent and 8.0 per cent.
Although their projections are well below the BBS estimate of 8.13 per cent, the forecasted growth rate, if successfully realized, would be no mean achievement when compared with the GDP growth of many other developing countries. The quarterly economic review of the Metropolitan Chamber of Commerce and Industries (MCCI), released on Monday said that the power and gas shortage, insufficiency of investment and weak infrastructure are the major obstacles to growth, as they disrupt industrial production and also discourage new investment.
There are other downside risks such as poor implementation of public investment programmes (only 47.22% of the ADP has reportedly been implemented in the first nine months of the present fiscal), the growing requirement of subsidy payments by the state to different sectors, uncertain availability of foreign aid, and growing income inequalities.
The MCCI review mentioned that agriculture sector performed well in the quarter under review (Q3 of FY19). The sector grew at a marked rate of 4.19 per cent in FY18 compared to a moderate growth of 2.97 per cent in FY17. Outgoing President of the apex trade body, Federation of Bangladesh Chamber of Commerce and Industries (FBCCI), Shafiul Islam Mohiuddin told Bangladesh Post that the economy is progressing positively in almost all the indexes, the government is also trying to ensure necessary infrastructure support and ensuring supply of power and energy as per the demand, and it will further contribute to expediting the accelerated economic growth.
In FY18, the broad industry sector managed to grow by 12.06 per cent, exceeding the growth rate in the previous fiscal by 1.84 percentage points, despite the shortage of energy, both gas and power. The manufacturing subsector recorded 13.40 per cent growth in FY18, which was 2.43 percentage points higher than the previous fiscal year's 10.97 per cent. Within manufacturing, the large and medium scale industries subsector performed better than in the previous fiscal, growing at 14.26 per cent in FY18, compared to 11.20 per cent in FY17.
The power supply situation improved in the quarter under review, but the demand for power, too, shot up. According to BPDB, the demand for electricity was 4,013 mw on 31 March 2019 and there was no load shedding. Total installed capacity rose to 18,242 mw in April 2019 from 17,965 mw in January 2019, but production remained low because of gas shortage and also because of the shutdown of some power stations for maintenance.
The credit growth in February 2019 was also lower than the credit growth target of 15.90 per cent set in the monetary policy for the second half of the present fiscal year (MPS, H2 of FY19). Total liquid assets of scheduled banks stood at Tk.247,149 crore at the end of February 2019, which was 34.89 per cent higher than the minimum liquidity requirement of the scheduled banks.
The disbursement of industrial term loans during October-December of FY19 stood at Tk.24,256 crore, which was 26.9 per cent higher than the amount of Tk.19,112 crore disbursed during the immediate previous quarter (July-September) of FY19. The rate of implementation of the Annual Development Programme (ADP) in the first nine months of the current fiscal year was 47.22 per cent, which is slightly higher than that of the corresponding period of the previous fiscal year (45.65%).
The merchandise export earnings in the first nine months of the current fiscal year (July-March of FY19) rose by 12.57 per cent to US$ 30.903 billion from US$ 27.452 billion in the corresponding period of the previous fiscal year. Export earnings in these 9 months exceeded the strategic target (US$28.828 billion) by 7.20 per cent.
The readymade garments (RMG) played a major role in the overall increase in exports, accounting for 83.98 per cent of total exports in July-March of FY19. However, export earnings in the quarter under review (Q3 of FY19) grew by a lower rate of 9.09 per cent. Bangladesh received US$11.869 billion in remittance in the 9-month period between July and March of FY19, an increase by 10.28 per cent from US$10.763 billion during the same period of FY18. However, remittances in the quarter under review also increased by 14.23 per cent to US$4.374 billion from US$3.829 billion.
Development partners disbursed US$4.080 billion in concessional loans and grants in July-February of FY19, which was 19.16 per cent higher than the amount disbursed (US$3.424 billion) in the corresponding period of FY18. The MCCI review found that the capital market witnessed a declining trend in the quarter under review, and also panic sales by jittery investors amid a lack of confidence. Stocks tumbled on 31 March 2019, the last trading day of the quarter, the prime index of the Dhaka Stock Exchange (DSE) fell below 5,500-mark after three months as worried investors continued their selling spree amid concern over the prevailing liquidity crunch in the financial sector.
According to the Bureau of Manpower Employment and Training (BMET) data, the country's outbound jobs decreased by 7.53 per cent to 165,328 in January-March of FY19 from 178,788 during the previous quarter (October-December of FY19). Year-on-year, too, the number declined by 19.04 per cent from 204,201 during January-March of FY18.
Sector insiders attributed such drop in overseas jobs mainly to a downward trend in manpower recruitment by the Middle Eastern (ME) job destination countries, and also to the growing number of expatriates returning home from abroad. They suggest the need for formulating a long-term policy with restructuring the education and training systems that would facilitate improving the workers' skills to a standard suitable for the job destinations. They also recommend taking necessary measures to diversify job markets.