The ongoing political turmoil and uncertainty have largely affected economic activities and curbed investment appetite.
As a consequence, implementation of the annual development programme (ADP) suffered a setback while private credit growth and imports slowing down in the first six months of the current fiscal year.
The continued blockades and hartals enforced by the opposition political parties have virtually halted the pace of ADP execution – only 20% in the first five months of the current fiscal year. Bank borrowing reduced by Tk3,500 crore in the first half of the current fiscal.
“In fact, physical progress of the ADP implementation literally came to a complete halt as the country’s entire communication network remained almost suspended during the political programme such as blockades and hartals,” said an official of Planning Commission.
“Day labourers and project engineers could not event attend the project sites outside Dhaka for the last three months due to the lack of transportation facilities,” he added.
Pointing to the slower implementation of Dhaka-Chittagong four-lane highway, an official of the Implementation, Monitoring and Evaluation Division (IMED) said the entire work of the road bogged down as the work totally depends on smooth transportation of construction materials.
The contractors were also unable to carry the much-needed materials to the sites, official added.
Of the Tk 65,872 crore earmarked for the ADP of the current fiscal year, only 13.156 crore or 20% could be spent during July –November period while Tk13,574 crore or 25% of the original ADP’s Tk55,000 crore was spent in the same period of the last fiscal year.
The demand for cash has been declined in the last six months because of government activities have stopped last six month including slow down the pace ADP implementation, according to the Bangladesh Bank data.
Net government borrowing from banking system stood at Tk4,570 crore during July –December period last year while it stood at Tk7,926 crore during the same period one year back. As per the central bank data, the government borrowing from banking system was Tk15,630 crore in the first six month of 2011-12 fiscal year.