Time needs to increase demand

Time needs to increase demand

Special Desk :    |    ০২:৪৪ পিএম, ২০২১-০৭-০৮

The government is banking on strong domestic demand for offsetting the impact of the economy-shattering Covid-19 pandemic to achieve better mid-term growth in the coming years.

A budgetary document said the focus will be on increasing consumption and investment to stimulate domestic demand and boost exports to augment external demand that has been hit by the pandemic since March last year.

The growth rate for 2021-2022 fiscal has been set at 7.2 percent, which is consistent with the government’s long-term plan and taking the post-pandemic recovery situation into account.

The government expects that the inflation rate will remain at 5.3 percent during the period.

The next budget will be the 2nd year of the implementation of the 8th Five Year Plan.

The first stage of the Perspective Plan (2021-2041) framed in line with the ‘Vision 2041’ will be materialized through the implementation of the 8th Five Year Plan.

Growth in remittances will also continue in the medium-term, the document stated explaining the government’s optimism.

The government is attaching importance to the development of improved transport structure and ensure power and energy security through public investment.

On the other hand, acceleration of the GDP growth and creation of employment by increasing the supply-side growth of the industrial sector are among the main targets.

The document hopes that these targets will be achieved through the rapid implementation of the work to establish Economic Zones.

Bangladesh’s sustained achievement of high GDP growth in the last decade has been halted temporarily due to the Covid- 19 pandemic.

Even though it achieved a record 8.15 percent growth in 2018-2019 fiscal, it has slowed down to 5.2 percent in FY2019-2020 due to the pandemic.

The GDP growth rate was originally estimated to be 8.20 percent for the 2020-2021 fiscal on the assumption that the economy would recover from the impact of the pandemic.

But the economic activities slowed down and the expected momentum in import and export activities did not take place due to the continuation of the impact of the pandemic and the surge of its second wave and resulting lockdowns in Bangladesh and other parts of the world.

However, considering the better-than-expected growth in remittances and the implementation of the large stimulus packages by the government to facilitate economic recovery, the GDP growth rate has been revised at 6.1 percent for the current fiscal year.

The document said that successful implementation of the 8th Five Year Plan will, on one hand, lay the foundation of ‘Vision 2041’, and help achieve the targets of SDGs and Bangladesh Delta Plan-2100 on the other.

Moreover, a special emphasis has been given in this Plan on achieving higher economic growth, increasing income, creating employment, and implementing poverty reduction strategies by addressing Covid-19 challenges.

To promote inclusive growth, guidelines have been framed for implementing programs on the development of labor-intensive and export-oriented industries, diversification of agriculture, flourishing of the services sector, development of ICT-based entrepreneurship to embrace 4th Industrial Revolution, and creation of overseas employment, the document reads.

But the main foundation for the successful implementation of this Plan lies in attracting domestic and foreign investment in the private sector.

"... and to that end, the government will strive to create an investment-friendly environment," it adds.

Alongside, priority is given to increase public investment, particularly the size of the Annual Development Programme.

To implement the ADP, which is Tk 225,324 crore for 1,426 projects, priorities are given on strengthening the health sector infrastructure, establishing the social safety net, and removing infrastructural bottlenecks to promote private sector investment and accelerate economic growth.

Besides, the Plan also emphasized the agenda, such as the establishment of Digital Bangladesh, the development of human resources, promoting good governance in public enterprises.