Bangladesh’s economy may lose pace next fiscal year: UN report

Bangladesh’s economic growth may slow to 6.5 percent in fiscal 2017-18, the Economic and Social Commission for Asia and the Pacific or ESCAP forecasts in a report.

The forecast compares with 7.1 percent growth, a record achieved in Bangladesh last fiscal year.

In its report ‘Economic and Social Survey of Asia and Pacific’, ESCAP made the estimate citing trade preservation policies of different countries and a relaxed flow of remittance.

Economic growth is projected to stand at 6.8 percent at the end of the current fiscal year, the UN agency said in a statement.

Sudip Ranjan Basu, economic affairs officer at UNESCAP’s Bangkok office, highlighted different aspects of the report at Dhaka’s IDB Bhaban on Monday.

Bangladesh aims to achieve 7.2 percent economic growth in 2016-17. Finance Minister AMA Muhith raised his target higher at 7.5 percent.

 KAS Murshid, director general of Bangladesh Institute of Development Studies, and Robert Watkins, UN resident coordinator in Dhaka, were present at the programme.

 The region’s developing economies are projected to grow at 5 percent and 5.1 percent in 2017 and 2018, respectively, up from 4.9 percent last year, the UN agency said.

 “The report emphasises fund management and effective governance. The better the governance, the better resource management is done in a country,” said Sudip.

 To address these challenges, the survey calls for effective governance, in particular a proactive fiscal policy through productive investments in such areas as infrastructure, social protection and resource efficiency.

 The survey praised Bangladesh for maintaining steady economy with GDP growth above 6 percent since 2011.

 “The survey will help Bangladesh get an understanding of SDGs (sustainable development goals) and plan accordingly to achieve them,” said Watkins.

Murshid of BIDS said the new VAT law would not create any long-lasting impact on the country’s economy.

“Only 32,000 registered people will pay VAT at 15 percent rate which may not create any impact on living standards of people or the economy overall.”