However, economists termed the target as highly ambitious and unachievable as all sectors, except agriculture, have been badly hit by the Covid-19 outbreak
Amid uncertainty and bleak future of a global economic recovery, the Bangladesh government has set a target of 8.2% gross domestic product (GDP) growth for the next fiscal year 2020-21.
However, economists termed the target as highly ambitious and unachievable as all sectors, except agriculture, have been badly hit by the Covid-19 outbreak.
Finance Minister AHM Mustafa Kamal came up with the projection on Thursday while he was announcing the national budget for fiscal year 2020-21 in the parliament.
“Our GDP grew consistently at an increasing rate in the last decade. We achieved a GDP growth of 8.15% in the FY2018-19, the highest among countries in Asia. Strong domestic demand has been the main driver of our growth,” the finance minister said in his budget speech.
However, due to the fall in exports and lower than expected growth in remittances as a result of long and sustained worldwide lockdowns arising from the impact of Covid-19, the GDP growth rate of the current fiscal year has been revised downward at 5.2%, added the minister.
In view of the post-Covid recovery, the growth rate has been projected at 8.2% for FY2020-21 in line with long-term plans, he added.
“The Finance Ministry thinks that the economy will see a sharp V-shape recovery in the FY21. But, it will depend on how the country will be able to contain the health hazards and to revive the economic activities, SANEM Executive Director Salim Raihan told Dhaka Tribune.
Major contributors to GDP such as exports and remittance are at dire state. Exports are going through sharp decline, while the migrant workers are losing jobs and returning home in large numbers, said the economist.
On top of that, the global recovery is revised every month by the World Bank and the forecast for growth is negative for most of the strongest economies.
In the given context, the GDP growth target for Bangladesh is unachievable, said Selim.
He further added that the government should be more thoughtful in projecting the GDP and it will be not be any good to paint a rosy picture which will give the people a kind of complacency while deviating from the real one.
“Except agriculture, all other sectors contributing to the GDP witnessed a devastating impact of the Covid-19 pandemic. If the economic activities get back to normal along with controlling the spread of coronavirus, the situation may improve,” Khondaker Golam Moazzem, research director at the Centre for Police Dialogue (CPD), told Dhaka Tribune.
However, there is no possibility that the GDP will grow above 3% and the CPD’s forecast is 2.5% for the FY21, he said.
“The 8.20% GDP growth target is highly ambitious and unrealistic, said the economist.
On the other hand, global lenders and research organizations’ have forecast Bangladesh’s GDP growth to be very low.
The World Bank (WB) has projected that the country’s gross domestic product (GDP) will grow 1.6% in the current fiscal year as the coronavirus fallout weighs on the anticipated economic expansion.
Besides, the country is likely to witness a mere 1% growth in GDP in the next 2020-21 fiscal year as the virus-related economic disruption will not end anytime soon.
The International Monetary Fund projected a 3.8% GDP growth.