Staff Reporter :The World Bank (WB) has contradicted the government claim that the country would achieve a 7.05 per cent growth during the current fiscal. WB’s Dhaka office made the projection of the growth in a report released on Saturday.It said, all the key macroeconomic indicators except export showed a negative trend in between July 2015 and February 2016 than that of the previous year raising the doubt about achieving a 7.05 per cent growth at the end of current fiscal.The World Economic Update released in January this year projected a 6.7 per cent GDP growth for Bangladesh this year. “Bangladesh’s GDP growth is expected to accelerate to 6.8 per cent by the fiscal 2016-17, on the back of strong export coupled with favourable oil prices. But achieving the 7.05 per cent growth as projected by the government for the current fiscal (2015-16) is impossible under the prevailing macroeconomic situation,” said Dr Zahid Hussain, the Lead economist of the WB’s Dhaka office, while releasing the report titled “Bangladesh Development Update”. Based on data of Bangladesh Bureau of Statistics (BBS), the government earlier claimed that Bangladesh’s gross domestic product (GDP) would grow from 6.55 per cent to 7.05 per cent at the end of the current financial year. Raising question about the sources of 7.05 per cent GDP growth, Dr Zahid Hussain said, it does not match with the ground economic realities when all sectors except export do not perform well to substantiate the growth estimated by the BBS.Referring to growth forecasts for current fiscal by several organisations, he said, “Some predict 6.3, some 6.6 and then again there are forecasts of 6.8 while the government says 7.05.Expressing doubt about achieving the 7.05 per cent GDP growth for the current fiscal year, he said, the poor implementation of annual development programme and sluggish remittance and revenue earnings may help dragging on the growth.”The government achieved 14.4 per cent growth in tax revenues between July 2015 and February 2016 while it was 16.2 per cent during the period in last FY. The ADP implementation rate during the period stands 41.1 per cent while it was 43.8 per cent in the same period of last FY. Such declining trends of revenue growth and ADP implementation rates were not supportive to the 7.05 growth,” he added. The Bangladesh Development Update, April 2016 notes that Bangladesh economy remained strong and resilient despite external and internal challenges.However, the WB did not come up with its own forecast for the year, but made its projection for the subsequent year (2016-2017) at 6.8 per cent, even below the government’s forecast for this year.The WB still found this growth trend to be strong but emphasised that BBS data on the economy needed to be reconciled.According to BBS data, the projected growth in agriculture went from 0.5 per cent in 2014-15 to 0.4 per cent in 2015-16, private investment from 1.5 per cent to 1.3 per cent, private consumption from 3.8 per cent to 3.5 per cent, industry from 2.7 per cent to 2.9 per cent, manufacturing from 1.9 per cent to 2 per cent, services from 3 per cent to 3.4 per cent, government consumption from 0.4 per cent to 0.6 per cent, government investment from 0.8 per cent to 1.5 per cent, exports from -0.5 per cent to -0.1 per cent and imports from -0.7 per cent to 1.9 per cent.”From the BBS data, it is difficult to draw such a conclusion of 7.05 per cent growth,” said Zahid Hussain.When asked why the WB refrained from making its own growth projection right now, he said since a figure has already come from the government, it is irrelevant for the WB to carry out such an exercise.The WB earlier projected the GDP growth for 2015-16 at 6.3 per cent. WB Country Director for Bangladesh Qimiao Fan said it is useless to place too much focus on numbers while talking about Bangladesh growth.”It does not matter if the growth is 6.3 per cent, 6.8 per cent or 7.05 per cent. What matters is that it is already a strong growth and Bangladesh is one of 12 major countries that attained 6 plus (per cent) growth despite the global uncertainties,” he added.Both Finance Minister AMA Muhith and Planning Minister AHM Mustafa Kamal have said that the multilateral agency’s forecast is not always accurate.
