Dhaka, Oct 25 — The World Bank and the government of Bangladesh have joined issue over the global lender's latest economic update on Bangladesh.
In the update report, the World Bank has termed the 6.7 percent growth in gross domestic production (GDP) in 2010-'11 fiscal as strong, but says outlook for 2011-'12 financial year is 'uncertain'.
On the other hand, finance minister A M A Muhith says the seven percent GDP growth target set in the budget for 2011-'12 financial year 'will be achieved'.
"I've said before and saying it again that seven percent GDP will be achieved in the current fiscal," he told bdnews24.com on Tuesday.
The report said the GDP growth rate in 2010-'11 fiscal reflected good performance in the manufacturing and construction sectors, two successive years of bumper crop harvest and sustained high contribution from the services sector.
"However, a slowdown in remittances in FY11, high and volatile inflation, overshooting of monetary targets, financial sector weaknesses, growing external imbalances and increasing fiscal deficit as well as the composition of deficit financing remain areas of concern," it added.
The report quoted Sanjay Kathuria, World Bank's lead country economist for Bangladesh, as saying, "Rapid growth in subsidies, sustained high rate of growth of credit to the private sector and monetary financing of the fiscal deficit have led to the decline in manoeuvrability."
Quoting Lalita Moorty, senior economist for Bangladesh in Washington, the report said, "It will be vital for Bangladesh to ensure sound macroeconomic management, since expansionary macroeconomics policies could increase risks on the current account and make inflation management more difficult."
About the 'risks', the finance minister said, "I spoke about risks in the budget speech. There could be risks in economy. We'll be able to achieve the expected GDP target by tackling the risks."
"The risks will be removed within months," he added.
From:www.bdnews24.com
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