The New Nation - Internet Edition

Staff Reporter

Growth in industrial remittance grew slow during the second quarter (October to December) of current fiscal year (2007-08). Trade deficit increased and inflation difference between urban and rural livings have grown wider during the period.

Despite all those drawbacks, the Gross Domestic Products (GDP) growth has been forecast to sustain between 6.0 to 6.2 by the end of current FY 2007-08, the second quarterly report of Bangladesh Bank reported.

This GDP forecast was, however, subjected to some geopolitical stability in Bangladesh, the report said. Timely election as well as continuing present development initiatives would play vital role to make this GDP forecast a reality, said Chief Economist of Bangladesh Bank Mustafa Kamal Jubari.

He presented the quarterly report of Bangladesh Bank yesterday on behalf of the Governor of central bank.

The quarterly report also stated that national economy has come up with some short-term but potential possibilities. To convert them to permanent, Government and related financial initiations have to adopt some development strategies on immediate basis.

Recommended development strategies are, adaptation of supportive finance policy in general, enhance confidence among businessmen, initiatives to develop business supportive infrastructures like transportation and power security, frequent modification of existing financial structures, ensuring socio-political stability and continuation of current development initiatives.

It was also mentioned in the report that recent natural disasters like flood and Sidr, temporary halt ness in local production as well as inflation in international market has forced the pre decided GDP to revaluate this year, which was set 7.00 per cent in the beginning.

According to the report, after a financial draw back in early this year, national economy has started coming back to prosperity. The central bank has also initiated distribution of sufficient agriculture loans to ensure maximum production in this Boro season. Local economic growth would gain force after the successful Boro production this session, as expected.

The flow of industrial loans was satisfactory during last three months, as reported. Export of RMG, leather and tea products has witnessed significant rise during this period. Growth in industrial sector is expected to sustain between 8.5 to 8.7 per cent, as stated.

Growth in national remittance and refinancing policy of Bangladesh Bank in house financing sector has encouraged growth in construction sector, said the report. Despite price hike in building raw material the sector projected significant growth, the report added.

In service sector, the quarterly report forecast 6.1 to 6.3 per cent growth. On the other hand, earning and use of remittance was set at 10.8 and 16.4 per cent accordingly of total GDP in current fiscal year. During the first half of the year, total Tk 112.1 billion remittance was earned from domestic sources while Tk 91.8 billion was earned only from the banking sector. External remittance during this period was recorded at Tk20.3 billion.

Price inflation in food items was projected to reach at 8.0 to 8.2 per cent during current fiscal year. Equity market also has sustained its positive growth during this period. It is expected that the market situation to improve further as new companies are likely to enter by the end of the fiscal year.