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Report: 7% growth still achievable in H2

  • Published at 01:12 am March 31st, 2017
  • Last updated at 01:13 am March 31st, 2017
Report: 7% growth still achievable in H2
A new research report assessed that a 7% growth rate is still achievable in the second half of the current fiscal year, on the back of moderate credit growth, higher rates of public and private sector investment, stabilisation of remittance earnings, and stronger exports, due to a stronger dollar. The report titled “Global Headwinds, Local Resilience and Rising Markets: Update on the Macro Economy and Capital Markets,” was prepared by Sajid Amit, Director of Center for Enterprise and Society (CES) of the University of Liberal Arts Bangladesh (ULAB). It suggested that a disciplined monetary policy management and a more ambitious fiscal policy implementation are important to weather the shocks to the external sector in the intermediate term. The report emphasised a balancing act, which is to encourage investment without heating up the economy or the capital markets. In addition to private sector investments, mobilising revenue for public sector investment will be important in the short run, according to the report. The report mentioned that Bangladesh’s strong external reserves are a panacea given the external sector shocks and it will be essential to maintain the current high levels. “The recent rally in the capital markets, while a positive sign of investor confidence, should not be allowed to enter a bubble territory. It is important for brokers to communicate the same to investors just as it is for policy-makers to be surgically precise with regard to monetary policy management,” the report said. “The capital markets will be an important growth driver in the longer run,” it added. According to the report, the country’s large pool of savings, despite low banking sector penetration, may not be adequately utilised by the banking sector. The report said: “It is essential to develop policies that encourage issuance of fresh and fundamentally strong equities that render the capital markets a source for financing long-term investment.”