The New Nation - Internet Edition

UNB, Dhaka

Bangladesh Bank Governor Dr Salehuddin Ahmed yesterday brushed aside the World Bank's projection on the country's poor economic growth for the current fiscal year and said their forecast is too much irrational.

"Their projection is too much dependant on numbers only," he told a seminar on Bangladesh's economic prospects and challenges in view of the current global recession at Spectra Convention Centre.

Economists, senior bankers, business leaders, experts and former bureaucrats took part in the discussion organized by Citibank NA. World Bank's South Asia Division economist Anushka Shah presented the keynote paper.

"The GDP estimate of 4.8 percent is absurd… it's irrelevant," said the Bangladesh Bank Governor, adding that the central bank still hopes that the GDP growth would remain at a range between 6.0 and 6.2 percent during the current fiscal year.

The official estimate, however, still remained at 6.5 percent, while the World Bank on Wednesday estimated it at 4.8 percent in case of worse scenario and 5.4 percent as per a liberal estimate.

Dr Salehuddin said he discouraged the World Bank and the IMF several times not to put forward their comments based on figures only.

He appeared confident to say that the country's economic growth would not be affected to an extent as apprehended by the development partner in view of the recession. Because, he said, the exports and remittance still remained strong while the macroeconomic situation remained stable.

"The foreign exchange reserve is fine and the exchange rate remained stable," he added.

Replying to a question after the seminar, the central bank governor told reporters that he does not think the new elected government would feel an economic pressure after assuming power. "We're in a right track… but, still it's a challenge," he said.

He explained the trend of remittance and exports at the seminar apparently in response to the World Bank's apprehension that these would be affected due to global recession, pulling down the GDP growth.

The Governor said the remittance inflow slowed down as compared to the last fiscal year, but it remained well on track on month-to-month basis. "The trend is not negative, it's positive."

He said the construction work in the Middle East would slow down due to the recession, but it's not that the ongoing construction would close down overnight.

Exports increased 42 percent even in the peak of the turmoil, indicating higher demand for low-end Bangladeshi apparel items in the developed country markets, he said. "The recession is rather an opportunity for Bangladesh."

In response to a demand for depreciation of local currency, the BB Governor suggested the business community to keep in mind that the exchange rate is not the only component to be competitive. "There are other tools to be competitive… the workers here are the world's cheapest," he said.

He added that the central bank does not administer the exchange rate, which is determined on the basis of demand and supply.