Country backpedals on growth goal

Bangladesh backtracks from its ambitious economic process target because it takes a 'conservative approach' amid possible local and global shocks, analysts have said.

In its next eighth five-year plan (FYP), the govt looks to expand gross domestic product (GDP) at an 8.5-per cent rate within the terminal financial year (FY) 2024-25.

In the Perspective Plan 2021, it set a target to the economy expand at a 10-per cent rate at the terminal FY 2021.

The development strategy was framed in 2010.

Meanwhile, the govt has proposed to trim the GDP target in its macroeconomic framework within the next FYP to be implemented between FY 2021 and FY 2025.

General Economics Division (GED) is framing the eighth FYP because the current seventh FYP expires in FY 2020.

When asked on Tuesday, GED member Prof Shamsul Alam said, "We've taken realistic and pragmatic approaches in preparation of subsequent five-year plan."

As most local economic indicators face a bumpy ride amid a dark global economy, they consider a sensible target rather than an ambitious one.

As per the draft FYP, economy will grow at 8.2 per cent in FY 2021, 8.3 per cent in FY 2022 and 2023, 8.4 per cent in FY 2024 and eight .5 per cent in FY 2025.

On the mooted macroeconomic policy, Prof Alam said: "We haven't taken a conservative approach to the expansion target within the eighth FYP. We've taken a practical approach."

Meanwhile, the country's GDP growth in FY 2019 was buoyant as economy expanded at an 8.15-per cent rate.

Analysts say GDP growth has broken past records because it is on a steep rise even after getting into the "7.0-per cent growth club" three years ago in FY 2015-16.

Economy grew at the speed of seven .11 per cent in FY 2016, breaking the "6.0-per cent growth trap" after nine long years.

In the national budget, the minister of finance set an 8.2-per cent growth target for FY 2019-20 getting to take it on a better trajectory within subsequent few years.

The GDP growth target is 0.05 percentage points above the 8.15-per cent final estimation in FY 2019.

According to the budget speech, the entire GDP size may rise to $347.7 billion in FY 2020 from last fiscal's $301.9 billion.

Economist Dr Mirza Azizul Islam said except remittance, all macroeconomic indicators performed negative in recent months which must affect the upper growth target.

He welcomed the government's realistic decision on resetting the annual GDP growth target, backtracking from its "overambitious" approaches.

About revised ambitions, Dr Islam said despite being more pragmatic, it's some risks too following the lower base of personal investment, foreign direct investment and vulnerable banking sector.

Prof Alam said they were getting to frame the eighth FYP which will specialise in more investment, human resources development and job creation.

"When private investment within the country are going to be lined up, i feel economy will grow at the targeted rate or maybe quite that," he told the FE.

"Since big economies like China and India are performing poor and therefore the US-China trade war has taken a replacement dimension, they might hit our economy too."

Many macroeconomic indicators of the country also are experiencing a rough ride, the GED member added.

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