Bangladesh has set a 7.5 per cent GDP growth target for the new fiscal year starting Jul 1, even as the war in Ukraine threatens to plunge the global economy into a fresh crisis, bdnews24.com reports.
The government plans to bank on strong "domestic and external demand" to drive economic growth in the medium term, said Finance Minister AHM Mustafa Kamal as he unveiled a Tk 6.78 trillion national budget on Thursday.
"Consumption and investment to increase the domestic demand and exports to increase the external demand will be one of our areas to focus on. Our goal will be to build improved communications, necessary infrastructure and ensure power and energy security through increased public, private and foreign investment."
The focus will also be on increasing the productivity of labour to increase export competitiveness, according to the minister.
"On the supply side, our goal is to accelerate the growth of the industry and service sector to achieve high GDP growth and employment. I am hopeful that this goal will be achieved through the speedy implementation of the establishment of economic zones."
While the GDP growth rate is viewed as a mark of economic dynamism, contemporary economists are reluctant to accept it as an indicator of sustainable development. However, Kamal has consistently set ambitious GDP growth targets in a tenure punctuated by the coronavirus pandemic and now a war in Europe.
Spurred by a record GDP growth of 8.15 per cent in FY19, the finance minister had again set a target of 8.2 per cent GDP growth for fiscal 2019-20 but the number had to be revised down to 6.1 per cent as the economy went through a turbulent phase. The country only achieved 3.45 per cent growth that year.
The growth rate increased to 6.94 per cent in the fiscal 2020-2021 and after riding out another wave of the pandemic, the GDP target was increased to 7.2 per cent for the ongoing year.
"In the last 13 years, the average GDP growth has been 6.6 per cent, above 7 per cent in FY2016-2017, FY2017-2018, and FY2018-2019 and exceeded 8 per cent in FY2018-2019. Even during the COVID-19 pandemic, the GDP growth in FY2020-2021 was 6.94 per cent which is remarkable," Kamal said.
"Considering the overall perspective, this fiscal year’s GDP growth is forecasted at 7.25 per cent. At the same time, the growth rate has been targeted to be 7.5 per cent for the next FY2022-2023, considering the lagged effects of the COVID-19 and the protracted crisis arising from the Russia-Ukraine conflict."
The World Bank's projected growth rate for Bangladesh in FY23 is 6.7 per cent.