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ADB sees 6.2pc growth PDF Print E-mail
Saturday, 20 September 2008

The Asian Development Bank has estimated GDP growth at 6.2 percent for FY 2008, the lending agency said in its Quarterly Economic Update of Bangladesh released Thursday.

Curbing inflation would be a key challenge, the report said, warning that Bangladesh Bank's accommodative monetary policy would fuel inflation if bank credits were not directed to the economy's productive sectors.
According to the ADB, food inflation rose to 12.3 percent in July from 11.1 percent in January 2008 while non-food declined to 6.3 percent from 11.4 percent during the same period.
The report however, said that inflation on a point-to- point basis, declined to 10 percent in June from 11.4 percent in January this year.
Revenue collection in FY 2008 recorded 1 percentage point higher growth compared to that of the previous year, which has been strongly aided by the interim government's tax reform measures, the report reads.
Meanwhile, industry sector growth declined by 1.5 percent in FY 2008 from last year. However, growth rebounded in the second half following a surge in exports, rise in private credit and gain in business confidence, says the ADB update.
Nonetheless, the escalation of prices of raw materials and import inputs in the international market slowed industrial growth relative to the previous year, added the ADB study.
The report cited the 15.9 percent export growth in FY 2008 as 'robust' driven by a rise in knitwear and woven garments exports while imports rose by something above than 26 percent due to sharp rise in food grain imports.
The 32.4 percent growth in workers' remittances has offset the higher trade deficit, which amounted to 60.2 percent during FY 2008, says the Quarterly Economic Update of Bangladesh.
Labeling the emerging power shortage is a major constraint to the development process the ADB stressed urgent actions to address the issue.
It said that large expansion in generation capacity is needed along with tuning up the transmission and distribution networks to keep up with the fast growth in electricity demand.
The ADB report recommended expediting exploration for new gas fields as gas supply shortages threaten in adding to generation capacity.
It also suggested formulation of the national e-governance strategy and implementation of the national information and communications roadmap for timely progress in the ICT sector.

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