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Government unable to predict next fiscal indices

  • Published at 04:38 am May 17th, 2013
Government unable to predict next fiscal indices

The government was unable to make fiscal and micro-level estimations for the next fiscal year, due to prolonged internal and external shocks, sources in the finance division said.

A senior official, requesting anonymity, also said major indicators, including the growth rate, inflation and budget deficit, is likely to be adjusted just before the announcement of the budget.

He added that the cyclone Mahasen might affect Boro crop in some parts of the country and this, in turn, could change the growth rate for agricultural products.

“If the cyclone turns into a big catastrophe for Bangladesh, then donors might come forward with disaster funds.”

Development partners had provided $4bn after cyclone Sidr in 2007 to develop long-term disaster risk management programmes.

Finance division sources said that although the figures have not been finalised, current estimates put GDP growth of the next fiscal at 7.2%, average inflation at 7% and budget deficits at Tk563bn. However, the figures are likely to change after the finance minister returns from his Tajikistan trip.

“For the last four years, we were very hopeful about the upcoming budget, but these last two months were a disaster. I do not think I have faced such crises in any other budgets,” the minister, AMA Muhith said in a pre-budget meeting yesterday.   

“Considering the overall scenario of the last four years, we were expecting to formulate a good budget this time. However, the political turmoil of the last two months have affected the budgetary process and it is no longer easy for me to put together an ambitious budget for the 2013-14 fiscal year.”

He said ongoing political unrest coupled with the global image crisis and natural disasters due to climate change has turned the work of making the last budget of this government’s tenure a “great challenge.”

Finance division sources said the economy was split into three sectors – agriculture, industry and service. In order to achieve the current target of 7.2% growth in the upcoming fiscal, the agriculture sector has to grow by 4%, industry by 10% and service by 8%.

They said present data shows that the Aush and Aman crops did not turn out as expected and the Boro harvest is the last hope.

Professor Dr Shamsul Alam, a member of the Planning Commission's General Economics Division, said: “As an agriculture economist, I have told the media that there was little scope of large damage to Boro harvest due to [cyclone] Mahasen. [Insignificant] Harvests in Barisal and Patuakhali might be hampered because of the storm.”

The agriculture ministry’s Secretary-in-Charge, Dr SM Nazmul Islam, told the Dhaka Tribune that they will start estimating damages to Boro and other agricultural products starting today.

“It will take three days to estimate the damage of Boro harvest in Barisal and Patuakhali, and for the livestock ministry’s survey of the fisheries sector in Cox’s Bazaar to end.”