Bangladesh's impressive growth, and its journey towards a higher development trajectory have been globally admired, the actual GDP growth of 8.13 percent in FY19 also surpasses the government’s target of 7.80 per cent for the fiscal. According to the economic review report of MCCI on Wednesday, referring to the provisional estimate of BBS, the quarterly review of Metropolitan Chamber of Commerce and Industries (MCCI) suggests that the GDP growth in the just-concluded fiscal (FY19) is 8.13 percent, up from 7.86 per cent in the previous fiscal (FY18).
"Another laudable success of the government and the policymakers was to bring down the annual average inflation to 5.48 per cent in FY19 while the official target was 5.60 per cent," the report mentioned, saying that however, despite the creditable performance of the economy in certain areas, overall achievements remain below the true potential.
The report further observes that the inadequate infrastructure, lack of investor confidence in the economy, shortage of power and energy, are now some impediments to the growth of the economy. It hoped the impediments would be removed to restore the confidence of the foreign investors as well as the country’s own business and investor community.
In the quarter under review (Q4 of FY19), some risk factors such as power and gas shortage and weak infrastructure that disrupt industrial production and also discourage new investment appeared as major obstacles to the expansion of economic activity.
The report suggested that general point to point inflation fell 0.11 percentage point to 5.52 per cent in June 2019 from 5.63 per cent in May 2019 due to decline in both food and non-food prices while year-on-year, the inflation rate in June of FY19 fell slightly by 0.02 percentage points to 5.52 per cent from 5.54 per cent.
Food price inflation fell 0.09 percentage points to 5.40 per cent in June 2019 from 5.49 per cent in the immediate past month of FY19 (May 2019), but year-on-year, food price inflation decreased 0.58 percentage points from 5.98 per cent.
On the other hand, non-food inflation came down by 0.13 percentage points to 5.71 per cent in June 2019 from 5.84 percent in the previous month while year-on-year, the non-food inflation increased by 0.84 percentage points from 4.87 per cent. BBS data also shows that prices of food items such as rice, pulses, sugar, edible oil, fish and vegetables dropped during the period under review, while house rent and cost of clothing, household goods, fuel, medical and transportation services, and education increased.
The review sees the country's trade deficit narrow by 14.56 per cent to US$14.658 billion in July-May of FY19 from US$17.156 billion in July-May of FY18. The deficit declined mainly because of the steady growth of exports and a fall in imports.According to the EPB, export earnings reached an all-time high in the just-concluded fiscal year (FY19), where it grew by 10.54 per cent to US$40.53 billion from US$36.67 billion in the previous fiscal year.
The increase also beat official forecasts, being 3.93 percent higher than the annual target (US$39 billion). Not surprisingly, readymade garments (RMG) played a major role in the overall increase in exports, contributing 84.21 per cent of the total in FY19. Economists and analysts attribute the rise to a combination of factors including improvements in safety measures in the apparel sector, government’s policy support, political stability, and the US-China tariff war that forced global brands to change their sourcing destination to Bangladesh.
The report finds that the overall economic situation is positive as indicated by steady improvements in the major economic indicators. Steady progress in the agriculture sector, moderately good growth in industry, decline in the inflation rate, macroeconomic stability, build-up of a comfortable foreign exchange reserve, and good progress in achieving the SDGs boost people’s confidence in the country’s ability to attain accelerated economic growth and emerge as a middle-income country by the turn of the present decade.
