Bangladesh economy can grow at seven percent, says Muhith

Bangladesh is capable of achieving a 7 percent growth target set in the proposed budget, Finance Minister AMA Muhith has asserted highlighting the economic capabilities.

In his closing speech on the 2015-16 budget in Parliament on Monday, he said international organisations viewed political instability as the main obstacle to achieving the target.

He hoped the political parties would help maintain stability in national interest.

“I believe achieving 7 percent growth is not an impossible dream for Bangladesh,” he said.

The 2014-15 budget had a growth target of 7.3 percent but initial data from the national statistics agency suggested the GDP grew at 6.51 percent.

Muhith presented a Tk 3 trillion budget for the new fiscal on June 4 that will be passed on Tuesday. It will be implemented from July 1.

He defended his ambitious budget, saying the last budget had also evoked similar criticism.

“We’ve been able to achieve an average growth of 6.2 percent in recent years maintaining macroeconomic stability,” Muhith pointed out.

He noted that the budget size increased by nearly four times from 2009 to 2014.

In its seventh fifth-year plan (2016-20), the government set a target of gradually raising the growth to 8 percent by 2019-20, Muhith said.

“We have to increase our budget size gradually in line with the target,” he said. “So it’s only natural that our budget will be a little ambitious.”

The proposed budget size is 17.2 percent of the GDP.

According to Muhith, the average budget implementation capability was 91 percent from 2009-10 to 2013-14 fiscal.

“We’ve been able to increase our budget size to about Tk 3 trillion since we have the capability [to implement it],” he added.

The minister, who presented his seventh consecutive budget, also brushed off speculations about meeting the revenue target.

He said in years when the political scenario was stable, revenue collection was near the target.

Unexpected political turmoil and violence hindered revenue collection and spiked spending.

“But these do not suggest weakness in the budget’s financial structure,” he stressed.

The minister shrugged off criticism on the budget deficit, pointing out that the deficit in the proposed budget was 5 percent.

“Budget deficit never exceeded five percent in the last six years thanks to government policies,” he said.

“In fact, the average deficit in budgets between 2009-10 and 2013-14 fiscal was 3.6 percent.”

Muhith also pointed out that Bangladesh’s budget deficit was lower last year than those of other SAARC nations like India, Sri Lanka and the Maldives.

“Bangladesh is moving forward despite hurdles,” he said praising the ‘brave, resourceful, hardworking’ people who kept the economy running.

“I’m always optimistic about this country’s untapped potentials.”