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Government to take stock on economic situation next week

  • Published at 07:17 am November 5th, 2013

Finance Minister AMA Muhith has convened an economic policy meeting next week amid concerns over the current economic situation already battered by the ongoing political crisis in the run up to the national election.

The bad investment situation and instability in the banking sector have adversely affected the local business, intensifying the concerns, officials at the finance ministry said.

The meeting of money and exchange rate and fiscal coordination council and the resource committee is scheduled to be held on November 12.

The officials said the minister and the government high ups expressed concern over the economic situation and apprehended the situation might turn to its worst had there been no development in the political situation soon.

Prime Minister Sheikh Hasina also asked her cabinet members, high officials and different agencies of the government to take cautionary measures in the wake of the political crisis that might affect the country’s economic growth.

Officials at the finance division said implementation of the budget has been hampered due to deterioration in the political situation – only 11% of the Annual Development Programme has been released in the first quarter (July to September) this fiscal year as compared to a general phenomenon of disbursing 20% to 25%.

Import of capital machinery witnessed sharp fall due to the sorry-state of investment situation as reflected by the foreign exchange reserve, according to an official source. “Export growth will decline if the present political situation prevails.”

The World Bank, IMF and Asian Development Bank have already expressed apprehension that the    impending street agitation in the run-up to the national election would take a heavy toll on the economy and its growth.

They estimated the country’s GDP growth to remain below 6% in the current fiscal year although the finance ministry estimated the GDP (gross domestic product) to grow by 6.6% as compared to 6.3% in the previous fiscal year.

The government has a budgetary target of achieving 7.2% GDP growth in the current fiscal year.

The development partners also feared the labour unrest and suspension of GSP facilities might also affect the RMG exports, taking toll on the economic growth.

Adviser to the past caretaker government Dr AB Mirza Azizul Islam told Dhaka Tribune that the street agitation and hartal programmes have hindered the economic activities. “The country’s macroeconomic situation will fall in deep crisis if the political satiation does not improve shortly,” said the noted economist.