DHAKA, June 3: Bangladesh achieved a healthy and impressive economic growth in the outgoing 2011-12 financial year (FY12) amidst the persisting volatility in the global environment, according to the Bangladesh Economic Update of the World Bank (WB), released today.
Bangladesh Bureau of Statistics (BBS) preliminary estimated 6.3 percent GDP growth in the FY12, which is higher than the developing country average of 5.5 percent, but marginally lower than the South Asia average of 6.5 percent.
This is "healthy economic growth," the report noted. WB's lead economist Dr Sanjay Kathuria also termed the growth rate "very impressive" at the launching programme of the report, held at a city hotel.
"The Bangladesh's most recent economic growth is quite healthy by developing country standards," WB country director Ellen Goldstein said in her opening remark on the occasion. She, however, said that there are several headwinds like spillover effects of recession in the Euro zone and oil price increases that could derail growth in the near future.
"All Bangladesh can do is to prepare to face these risks by creating policy space, so that it can respond appropriately and in time as these risks materialize," she advised and alerted about inadequate infrastructure and energy shortfall where more attention would require for achieving sustainable growth.
The WB country chief also assured that the donor agency would continue its support to the government's objective of achieving annual growth rates high enough to become a middle income country by 2021.
The WB in its benchmark report also drew attention to some other areas those warrants policy reform and effective measures for maintaining both short and long term growth.
For instance, it said that the country would need to tackle the crowding out of private sector borrowing, and sustain macroeconomic stability to maintain its short-term growth rate while growth depends on policy reforms to raise savings and investments rates, improve trade prospects and ensure sustainable balance of payment (BoP).
"We know it takes time for monetary policy to have an impact. The monetary policy the central bank has taken is going to bring down inflation further in the future," said the economist.
According to the latest statistics of Bangladesh Bureau of Statistics, inflation rate was 9.93 in the month of April.
The economist, however, suggested the government to reduce its borrowings from the banks.
Regarding the share market, he said, "The share market was unstable for a number of days. Now the market is returning to stability."
Asked whether the central bank's monetary policy would have a negative impact on investment, he said, "According to the statistics of March, loan inflow in the private sector has been increased by 19.5 percent. We believe this is normal."
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