Bangladesh GDP growth may dip to 4.8 percent

November 27th, 2008 - 1:21 pm ICT by IANS  

Dhaka, Nov 27 (IANS) Bangladesh’s Gross Domestic Product (GDP) might dip to 4.8 percent, thanks to lower remittances from those living abroad and decline in readymade garment exports, the World Bank has said.The projection for the current fiscal was 6.5 percent but the global financial crisis too has had an adverse impact, The Daily Star said.

However, Finance Adviser (minister) Mirza Aziz rejected the analysis claiming that the GDP would actually cross six percent.

Unveiling its report, World Bank Country Director Xian Zhu said the impact of the crisis will be much more clear after the next three months. Contingency measures like providing government assistance need to be carefully thought out.

The World Bank expressed these views at a press briefing on Global Financial Crisis and its likely impact on Bangladesh at its Dhaka office. Zhu spoke at the briefing where World Bank’s lead economist Vinaya Swaroop made the keynote presentation.

Swaroop said: “We don’t know what will happen in Christmas season. Three months from now, the picture may look very different. Bangladesh has to remain watchful, particularly the government, civil society and the media.”

Bangladesh is scheduled to hold its ninth general election Dec 29.

Swaroop added: “It is extremely important to ensure that the new elected government has the relevant information and briefing to be able to quickly move and take relevant policy actions.”

World Bank senior economist Zahid Hossain said if the garment industry is affected, the government would have to consider some kind of safety net system.

Swaroop said: “Bangladesh did not have any impact on the first round of the global financial crisis because of lack of integration.” But it is integrated with the world economy in exports and remittance.

He projected two possible scenarios on GDP growth in the current fiscal year - one is 5.4 percent and in the worst case 4.8 percent.

Last year, GDP growth was 6.2 percent.

“In two months time, there may be some orders for garments from China to Bangladesh. There is likely to be a $500 million export from leather industry, we don’t know whether it will be maintained or not. In post-Christmas - in January, the situation will be much clearer. These are export orders, remittances in the second quarter. But we don’t know what actually would happen,” he said.

On the World Bank projection on GDP, Mirza Aziz said: “I don’t know how they made the estimate. However, I do not agree with them in any way.”

Talking to reporters after a meeting of three state owned banks yesterday at his planning ministry office, the adviser said: “Till now the indicators - export, remittance, inflation, credit growth - all are positive. Therefore, there is no probability of GDP growth being as low as 4.8 percent. Even recently, IMF projected GDP growth to be 5.5 percent.”

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