The New Nation - Internet Edition

Staff Reporter

The growth of the country's GDP is expected to be between 6 per cent and 6.2 percent during the current fiscal, according to a quarterly report of the Bangladesh Bank (BB) released yesterday.

Quoting the report during a press briefing, Mustafa K Mujeri, Chief Enonomist, BB, said disbursement of agriculture and industrial credit, import of industrial raw materials and intermediate goods, index of manufacturing production, increase in exports and inflow of remittances are indicators of the positive economic growth.

The report said the production of 'Boro' is likely to surpass its target of 17.5 million tonnes due to the government's massive agriculture rehabilitation programmes.

The report laid emphasis to see to it that the farmers get the fair procurement price of Boro fixed by the government. The fair price will give them incentives and encourage them to invest and produce more in the following seasons, the report added.

During the quarter of the current fiscal year the overall growth of manufacturing sector has been moderate and service sector has also maintained a reasonable growth, according to the report.

The report also suggested the government to act quickly to ease the electricity, gas and other infrastructure constraints so that production activities in different sectors can go unhindered which was earlier caused by natural disaster.

On the money and credit market development it said during the quarter of the current fiscal year the central bank continued to follow its pro-growth monetary policy stance for bringing price stability and highest sustainable output growth. The BB also pursued prudent policies in the foreign exchange markets.

On the issue of fiscal development in the first nine months of FY08 the report said the estimated total revenue and total expenditure stood at 7.6 percent and 10.9 percent of GDP respectively as against their yearly targets of 10.8 percent and 16.4 percent.

The report mentioned that the fiscal deficit as share of GDP reached 3.2 percent in the first nine months of the fiscal year, as against the yearly target of 4.8 percent.

And financing the fiscal deficit Tk 106.2 billion came from domestic sources that include Tk 30.2 billion form bank sources. Foreign financing stood at Tk 64.3 billion in the first nine months of FY08.

Showing the improvements in the banking system in Q3 FY08m, the report mentioned that the risk-weighted capital asset ratio for all banks increased and the ratio of gross NPL to total loans of the banking sector declined.

And as the regulatory authority of the banking and financial system is working consistently with its policy framework to persuade the banks to reduce the spread in a rational manner.

On the issue of external sector development, the report said the current account balance showed a small surplus during January- February 2008 due to a healthy growth in workers remittances and a strong export growth. The country is expected to maintain reasonable external sector stability in FY08 having a healthy growth inflow of remittances and a strong foreign exchange reserve position.

The growth-supportive monetary policy stance adopted by BB and growth- oriented policies of the government facilitated the process of easing inflationary pressure in the economy. The point-to-point (p-t-p) CPI inflation eased during February- March of this year. The inflation rate stood at 10.06 percent in March 2008 compared with 11.59 percent in December of 2007. This decline has been due to slow down in non-food price inflation, according to the report.

It further said supportive macroeconomic policies, steady growth in private sector led investment, effective and timely implementation of prudent public sector policies and programmes and the pursuit of ongoing institutional and structural reforms in a consistent and transparent manner are the key factors for the sustenance of this positive outlook of the economy of the country.

Habibullah Bahar, Economic Adviser of the central bank and other high officials were also present.