BD GDP growth to slow due to global crisis: ADB

Friday, December 18, 2009
DHAKA: Bangladesh’s economic growth is poised to slow to 5.2 per cent in 2009/10 fiscal year through June from 5.9 per cent in last year, the Asian Development bank said on Thursday, citing the continuing effect of the global economic slump.

“The adverse effects of the global economic slowdown would dampen export sector growth in 2009/10 fiscal year, which, in turn, will affect domestic industrial production,” the ADB said in its Quarterly Economic Update on Bangladesh.

Export earnings in July-October fell 6.7 per cent to $4.89 billion, reflecting subdued demand for its key readymade garments, which account for 80 per cent of total overseas sales.

The government had earlier said the impoverished south Asian country had hardly been hit by the global recession and it was hoping to achieve 6 per cent growth in the current fiscal year.

“To move the economy onto a higher growth trajectory, Bangladesh needs to improve its investment climate, upgrade infrastructure, reduce power and energy shortages, and accelerate economic reforms,” the Manila-based ADB said in the report.

It said the country’s farm growth is likely to slow to 4.1 per cent in 2010 from 4.6 per cent in 2009 while the service sector is projected to grow 5.5 per cent from 6.3 per cent in the last fiscal year.

The ADB said rising commodity prices, including rice prices in the international market, may create pressure on domestic prices while excess liquidity in the banking system may also be contributing to inflationary pressure. Inflation is rising after hitting a 90-month low of 2.3 per cent in June 2009.