Staff Reporter :
The Center for Policy Dialogue (CPD) on Sunday said Bangladesh economy is now under stress as its four major growth pillars have been facing problems.
The four areas are revenue mobilization, banking sector, capital market and balance of payments.
The country’s leading think-tank also saw the government’s policy deficiency in managing the current situation of the national economy.
CPD also expressed concern over the stagnant private sector investment while disclosing its report on “State of the Bangladesh Economy in fiscal 2019-20” at a press briefing at the CIRDAP Auditorium in capital Dhaka.
“The government relies mostly on public investment to spur growth, whereas private investment remains stagnant for years. Such economic management system is detrimental for the country’s long-term growth,” said CPD distinguish fellow Dr Debapriya Bhattacharya.
He said private investment to GDP ratio has been hovering around 23 per cent for the last few years, which is awful for the economy.
“Private sector credit growth hit a record low in August in the recent years,” he added.
Dr Debapriya also said that the government’s ongoing economic management has weak relation with private investment, revenue mobilisation, currency devaluation and trade activities.
Highlighting various problems in the national economy, he said, “Defaulted loans in the banking sector is on the rise at a time when the capital market is going through difficult situation.
Even the import of capital machineries, which has a direct link with the industrial production, has also decreased. Despite the facts, the country’s GDP growth surpassed 8.0 per cent in the last fiscal year from five-six per cent,” Bhattacharya said.
Raising question over the economic growth number, he said, the government should unveil data in detail on the achieved GDP growth on how it has played role in promoting the economy.
“The authorities concern should take immediate measures to mitigate the problems or else the country’s future GDP growth will face sluggishness,” he said.
CPD at the press briefing presented a paper on the national economy which cited that total revenue-GDP ratio of Bangladesh was only 9.9 per cent and tax-GDP ratio 8.9 per cent in FY’19, whereas average tax GDP ratio in developing countries is 15 per cent.
The paper said revenue mobilisation also could not keep pace with the GDP growth.
The paper also said revenue shortfall, which was Tk 870 billion (provisional) in the last financial year (FY’19), is likely to increase further in the current financial year if necessary measures are not taken.
CPD distinguished fellow Prof Mustafizur Rhaman, Head of Research Dr Fahmida Khatun, Research Director Dr Khondaker Golam Moazzem, Senior Research Fellow Towfiqul Islam Khan, among others, spoke on the occasion.
