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Macroeconomic stability under pressure: CPD

Published : Sunday, 14 January, 2018 at 12:00 AM Count : 55

The country's overall macroeconomic stability is under pressure, said the Centre for Policy Dialogue (CPD) on Saturday in their first report on State of the Bangladesh's Economy for the current financial year.
The private think tank's flagship programme titled Independent Review of Bangladesh's Development (IRBD) prepared the reading  which was delivered by its research fellow Towfiqul Islam Khan in presence of CPD's executive director Dr Fahmida Khatun, distinguished fellows Dr Debapriya Bhattacharya and Professor Mustafizur Rahman on the day.
The report using domestic and international data assessed the key economic indicators and identified insight strengths and weakness of the macroeconomic stabilities during first half of the current financial year.
The report focused on deteriorating performance of the banking sector, dropped industrial growth, lower contribution of agriculture, slow trend in remittance inflow, decreasing export performance and increasing gap between the poor and the rich.
It said during 2010-16 period, the national poverty rate declined by 1.2 percentage points per annum in contrast, the decline was 1.8 and 1.7 percentage points per annum respectively for the 2000-05 and 2000-10 periods resulting inequality between the poor and rich.
The report identified widening gap between planned and realised budget which is a common feature and weakness concerning the public finance framework and it said banking sector performance was disappointing there were low performance in recovering loan and frequent facts of financial scams.
As per the report export performance was subdued throughout 2017 that registered only 1.7 per cent growth against target of 8 per cent. Regarding external sector performance it said net foreign aid disbursement was about USD2.6 billion in FY17, posting a growth of 2.1 per cent.
Remittance inflow recorded a double digit negative growth for the first time in the history of (-) 14.5 per cent in Fy17. Current account in the balance of payment entered into negative terrain of (-) 1480 million though overall balance was keeping surplus due to remittance and FDI during the period.
The CPD study finds that revenue mobilisation may fall short for the sixth consecutive year in 2017-18 (FY18) and CPD earlier predicted that the revenue shortfall in FY18 could be between Tk430 billion and Tk559 billion.
A mismatch between financial and physical progress of annual development programme projects was identified by the CPD report which said high financial progress with low physical progress of the completed projects is disturbing feature in transparency and accountability.
Regarding the FY18 budget financing it said budget deficit fell within the projected limit during first two month of the current financial year (FY18) and the deficit financing was primarily driven by sale of NSD certificates which accounted for Tk90.45 billion.
Inflation is in rising trend that since mid-2017, Bangladesh, along with other South Asian countries, has experienced a rise in inflation. And in Bangladesh food inflation also increased significantly during the period.
Regarding export market the study says US imports of RMG products from Bangladesh is decreasing and price reduction both in EU and in market are also affecting Bangladesh's export  growth.

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