Economists project higher growth rate, reject WB forecast

Renowned economists predict gross domestic product (GDP) growth in Bangladesh will be around 5.5 percent this fiscal year, higher than the World Bank (BB) forecast.

The WB on Wednesday projected GDP growth at 4.5 percent, which economists, the finance minister and the central bank governor rejected outright.

The economic indicators are still strong enough for achieving GDP growth of 5.5 percent or more in the current fiscal year, they told The Daily Star when contacted separately.

“I guess this (fiscal) year’s GDP growth will be around 5.5 percent,” said Prof Wahiduddin Mahmud.

Growth could not dip in such a way in the remaining less than three months of this fiscal year that it would be only 4.5 percent, said the noted economist.

Bangladesh achieved more than six percent GDP growth on an average in the past five fiscal years since 2003-04 despite political uncertainties and natural disasters. The highest growth was 6.63 percent in 2005-06, and next to that 6.2 percent in 2007-08.

The world, especially the western nations, is facing a serious economic meltdown this year. Economic growth has slowed down significantly in many countries, including Asian giants Japan, China and India.

The WB, Asian Development Bank (ADB) and International Monetary Fund have predicted a lower growth for almost every economy in the wake of the global recession.

The ADB however projected Bangladesh’s GDP growth this fiscal year at 5.6 percent, which is close to the prediction made by the country’s top economists.

Asked about the WB forecast, Finance Minister AMA Muhith said on Wednesday, “I don’t accept it.”

The minister also raised questions on how the WB made the estimate.

Economist Wahiduddin Mahmud also questioned the basis of the WB projection.

Bangladesh Bank Governor Dr Salehuddin Ahmed said no economic indicator shows that growth would be as slow as 4.5 percent.

“We are hopeful of achieving six percent growth this fiscal year,” he said.

Former finance minister M Syeduzzaman said, “I believe it (GDP growth) will be between five percent and 5.5 percent,”

Mustafa K Mujeri, immediate past chief economist of the central bank, said GDP would grow by around 6 percent this year.

“I see growth can in no way fall below five percent,” said Mustafa, now director general of Bangladesh Institute of Development Studies (BIDS).

“Three quarters of the current fiscal year have already passed. The economy has performed quite well during these quarters despite the global downturn,” he added.

Source: The Daily Star, 05 April 2009


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