The government has projected to upgrade total investment in the country to 33.6% the total GDP on the mid-term basis (in FY25) aiming to overturn the economic shock from the Covid-19 pandemic and the Russia-Ukraine war.
In this investment, the private sector will contribute 26.65% of the GDP while the public sector will contribute 7%.
According to an official document, to attain the gradual acceleration of the GDP the private investment expansion is necessary along with public investment.
The estimated investment target for FY24 fiscal year is 32.8% with 25.91% from the private sector and 6.9% from the public sector.
For the running FY23, the investment target is 31.5% with the private sector contributing 24.81% and the public sector adding 6.7%.
The estimated GDP target for the current FY23 fiscal year is 7.5% while the target for FY24 and FY25 is 7.8% and 8% respectively.
The document stated that the GDP of the last FY22 was 7.25% while in FY21 it was 6.94%.
The growth in agriculture, industry and service sectors has been estimated at 5%, 8.8% and 7.9% respectively for FY25.
The official document said that about 7-8% real GDP growth is targeted over the medium term based on the assumptions of the gradual recovery of the world economy from the impacts of the pandemic and the early resolution of the Russia-Ukraine conflict.
The document emphasizes private investment, saying that it needs to be boosted along with public investment to increase capital accumulation.
Total investment in FY21 stands at 31% of the GDP where the contributions of private and public sectors are 23.7% and 7.3% respectively.
“But this level of investment is not adequate to achieve around 8% growth over the medium term,” the document said.
It also mentioned that public investment could not be increased to an expected level due to the lack of capacity in implementing the annual development program.
Recognizing this, the document stated the government has taken steps to bring about some structural changes at both project design and implementation levels.
It mentioned that a potentially huge global supply shock that may reduce growth and push up inflation is affecting the post-Covid-19 recovery.
“Russia's invasion of Ukraine and the economic sanctions on Russia that followed put global energy supplies at risk,” it said.
The document said that Russia supplies around 10 percent of the world's energy, including 17% of its natural gas and 12% of its oil.
The jump in oil and gas prices will add to industry costs and reduce consumers' real income, it added, saying that a record-high inflation is currently evident, which also affects Bangladesh.
The total investment in FY19 was 31.6% of the GDP where the share of private and public sector were 23.5% and 8% respectively.
The investment in FY20 was 20.8% of the GDP (private sector 12.7% and public sector 8.1%).
"But to attain 8% GDP in the mid-term basis” such investment is not adequate, it said.
The document mentioned that the government has taken various reforms measures like simplification of the fund release process for accelerating the rate of ADP implementation.
It mentioned that the overall agriculture sector, especially foodgrain, vegetables, livestock and forest resources was less affected due to coronavirus.
It said that disbursement of agriculture loans played an important role in the satisfactory growth of the agriculture sector.
