Budget: GDP growth revised to 5.2%, target for coming year at 8.2%

The government has revised down its estimated GDP growth for the current fiscal year to 5.2 percent in the wake of the COVID-19 epidemic.

The information was provided during the speech on the government’s budget for fiscal year 2020-21 by Finance Minister AHM Mustafa Kamal on Thursday.

“Strong domestic demand has been the main driver of our growth,” he said. “However, due to the fall in exports and lower than expected growth in remittances as a result of long and sustained worldwide lockdowns arising from the impact of COVID-19, the GDP growth rate of the current fiscal year has been revised downward at 5.2 percent.”

According to the government, the GDP growth rate for FY 2018-19 was 8.15 percent, which Minister Kamal touted as ‘the highest in Asia’.

“However, in view of the post-COVID recovery, the growth rate is projected at 8.2 percent for FY 2020-21 in line with long-term plans,” he added.

International agencies have forecast much lower rates, citing impacts of the pandemic on consumption.

The government expects an average inflation rate of 5.4 percent in the coming fiscal year.

The finance minister has tailored a Tk 5.68 trillion budget, which is 13 percent larger than the revised outlay of the outgoing fiscal year.

“It’s not the size of the budget that matters; rather it is how we confront the COVID-19 pandemic and salvage the wrecked economy. That's what is reflected in the budget,” the minister told bdnews24.com on the eve of the budget day.