Muhith rules out WB’s GDP growth forecast

Economists have expressed mixed reaction over the remarkable gap in the GDP growth projections by the Asian Development Bank (ADB), World Bank (WB) and the government.

In his budget speech, finance minister AMA Muhith set a target of 7.4 per cent GDP for the current fiscal year, while the WB projected 6.4 per cent and the ADB 6.9 per cent for FY18.

Just after the release of the Bangladesh Development Update September 2017 by the Washington-based global lender, Muhith ruled out the WB’s GDP growth forecast for Bangladesh for the current fiscal year.

The minister said the WB's projection is made every year based on the data that the lending agency collects from its own sources. “It doesn’t consider what happens in the country in reality and that’s why the lower projection,” he added.

The WB has projected a 6.4 per cent GDP growth for the country in FY 2017-18 in its latest report "The Bangladesh Development Update September 2017", which was unveiled at a briefing in its Dhaka office earlier in the day.

“Although the WB, ADB and the International Monetary Fund had forecast a lower GDP growth rate for FY 2016-17, they accepted the 7.24 per cent rate that had been achieved at the end of the year,” said Muhith.

He, however, conceded that floods and natural disasters would have some adverse impact on the country’s economic growth.

Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said that questions have been raised about the data of the Bangladesh Bureau of Statistic (BBS) as it has been politicised.

He, however, said no organisation has enough manpower to collect information. That is why everyone has to accept the data of the BBS and the Bangladesh Bank. Only the BBS can reveal the actual data of the GDP growth, he added.

Mansur said the government sets a GDP growth target every year which it may or may not achieve.

Prof. Shamsul Alam, a member of the General Economic Relations Division, differs with the projection made by the WB, ADB and Mansur. He said the economic indicators are positive and the target is likely to be achieved this fiscal year.

He pointed out that major indicators, except agriculture, have shown a rising trend. “I think the GDP target could be achieved if the agriculture losses due to floods could be recovered,” he said.

About the projection of the development partners, Shamsul said their predictions are based on the economic indicators of prevailing situations. “So, their projection is all right. They have finally accepted the BBS data because they have no alternative mechanism to get the actual data from the field level,” he added.

WB lead economist Dr Zahid Hussain said: “We’ve given the projection after considering the current situation of the economic indicators.”

He said their projection pertains to the global standard.

Stagnant private investment, weak export growth and declining remittance indicate lower growth than the projected target, he added.

Muhith rules out WBs GDP growth forecast

Economists have expressed mixed reaction over the remarkable gap in the GDP growth projections by the Asian Development Bank (ADB), World Bank (WB) and the government. In his budget speech, finance minister AMA Muhith set a target of 7.4 per cent GDP for the current fiscal year, while the WB projected 6.4 per cent and the ADB 6.9 per cent for FY18. Just after the release of the Bangladesh Development Update September 2017 by the Washington-based global lender, Muhith ruled out the WBs GDP growth forecast for Bangladesh for the current fiscal year. The minister said the WBs projection is made every year based on the data that the lending agency collects from its own sources. It doesnt consider what happens in the country in reality and thats why the lower projection, he added. The WB has projected a 6.4 per cent GDP growth for the country in FY 2017-18 in its latest report The Bangladesh Development Update September 2017, which was unveiled at a briefing in its Dhaka office earlier in the day. Although the WB, ADB and the International Monetary Fund had forecast a lower GDP growth rate for FY 2016-17, they accepted the 7.24 per cent rate that had been achieved at the end of the year, said Muhith. He, however, conceded that floods and natural disasters would have some adverse impact on the countrys economic growth. Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said that questions have been raised about the data of the Bangladesh Bureau of Statistic (BBS) as it has been politicised. He, however, said no organisation has enough manpower to collect information. That is why everyone has to accept the data of the BBS and the Bangladesh Bank. Only the BBS can reveal the actual data of the GDP growth, he added. Mansur said the government sets a GDP growth target every year which it may or may not achieve. Prof. Shamsul Alam, a member of the General Economic Relations Division, differs with the projection made by the WB, ADB and Mansur. He said the economic indicators are positive and the target is likely to be achieved this fiscal year. He pointed out that major indicators, except agriculture, have shown a rising trend. I think the GDP target could be achieved if the agriculture losses due to floods could be recovered, he said. About the projection of the development partners, Shamsul said their predictions are based on the economic indicators of prevailing situations. So, their projection is all right. They have finally accepted the BBS data because they have no alternative mechanism to get the actual data from the field level, he added. WB lead economist Dr Zahid Hussain said: Weve given the projection after considering the current situation of the economic indicators. He said their projection pertains to the global standard. Stagnant private investment, weak export growth and declining remittance indicate lower growth than the projected target, he added.