Rare example of revising down target

During the announcement of the national budget for the current financial year, the economy was under various pressures from domestic and external sectors. Even if the situation did not deteriorate further, achieving the target of 7.5% growth would not have been possible.

In the meantime, due to the prolongation of the war between Russia and Ukraine, the country's economy has experienced various crises. Coming out of all these dents, achieving over 7% growth in a few months would be impossible.

Now, the hope is that the government is able to achieve the new target even if a big target was announced on false assumptions in the beginning. The growth target has now been reduced somewhat. This is a good thing, because very rarely are targets revised down in Bangladesh.

In this financial year, imports, project implementation and government expenditure is being reduced in various sectors. Routine load shedding of electricity has also been done. The flow of private investment has also not accelerated.

In this situation, I think that the growth can be around 6%.

The reason for slowing growth is that private sector credit is also low. I don't know how much growth has been met up till now. 

In normal times, private sector investment is 24% of GDP, as has been for many years. But GDP is growing, despite low private investment. This is a mystery.

It is another point to have such a high growth with such a low investment GDP ratio. It doesn't match.

Public expenditure is being cut and people's consumption is also low because of high prices. Another thing that might not have been done was to raise interest rates, which was done in other countries.

Now the people of the country are under economic pressure. This economic growth is totally immaterial.

Survival and welfare have always been and still are the main focus. The main issue is whether people's welfare, consumption, and food consumption patterns can be met up under the pressure of inflation.

Fahmida Khatun, executive director, Centre for Policy Dialogue

TBS Reporter Jahidul Islam sopke to Dr Fahmida Khatun