Finance minister AHM Mustafa Kamal in the parliament on Wednesday said only the export sector is in the negative. But other sectors are not in a bad condition.
Is the minister’s claim real? The government would not have to formulate a law to take money from various organisations if the minister’s claim reflected reality.
Seven months of the 2019-20 fiscal have already passed.
According to official statistics, only foreign remittance is in a good condition. But export, import, revenue, government loans, private sector credit growth, inflation and capital market all are in a bad condition.
There is no growth in export earnings between July and January. During this period, exports decreased by 5.21 per cent in comparison to the corresponding period of last fiscal.
Export growth was 10.55 per cent in the last fiscal.
Import also decreased by 5.26 per cent in five months. Unfortunately, Bangladesh Bank is not updating the information of LC opening and settlement for several months.
Opening LC for importing raw materials for the industries has decreased by 19 per cent and settlement by 6.52 per cent.
For capital machineries that is 7.84 per cent and 12.48 per cent.
Analysing the import and export scenario, the situation of investment in the production sector is bad.
According to Bangladesh Bank, credit growth in the private sector is 9.11 per cent, which is an 11-year low.
Revenue income is also in a bad shape. Revenue income growth is only 7.39 per cent in six months although the growth was targeted to be 45 per cent. The revenue collection deficit is Tk 310 billion.
Due to the deficit, the government has to take loans from the banking sector.
According to the latest statistics, in six months the government has taken more loans than it planned to take through the entire year.
The government has taken loans of Tk 491.09 billion till January 21. This amount is the highest in the last one decade. The government needs more funds. So it is trying to take money from different state-owned and autonomous organisations. The government has formulated a law to this end.
A number of indicators of economy are in a bad shape over the last one decade.
However, the finance minister claimed that the all sectors are in a good shape except one.
The finance minister said the gross domestic product (GDP) will not be less than 8 per cent. Even the World Bank, ADB and JP Morgan also think so. But the authenticity of estimating GDP has been questioned for several years.
The economy is under pressure. The economists said the economy faces a downtrend.
The global situation is not favourable. Coronavirus is likely to intensfy problems of international trade. If the revenue income is not raised, the domestic econoimic crisis will persist.
Moreover, fresh investment is not coming in. Economists suggest necessary policies to be adopted, taking into consideration the overall economy.
The government must admit that the economy is in crisis. The economic crisis will not solve itself. The finance minister’s main challenge is to keep the economy on the right track, despite the multiple pressures.
Speaking to Prothom Alo, former lead economist of World Bank Dhaka office, Zahid Hossain said, “Only one indicator, foreign remittance, is in a good condition. Others are in the negative.”
It is not understandable how the finance minister made the claim, he added.
*This report, originally published in prothom Alo print edition, has been rewritten in English by Rabiul Islam.