CPD blames lax macroeconomic management for economic woes,Bngladesh

BANGLADESH NEWS

The Centre for Policy Dialogue (CPD) on Monday blamed lax macroeconomic management for the recent economic woes, including falling investment and soaring public expenditure.

“From economic perspective, the outgoing fiscal year was the weakest among the three years of the present government and the coming year will be more challenging in the wake of declining investment and rising political instability,” said CPD in a review report.

“The single most important objective for the next fiscal year should be reverting the investment situation to attain the targeted GDP growth,” it said.

The CPD’s observation came at an analytical review report on Bangladesh’s macroeconomic performance for fiscal 2011-12 and challenges for the next year at its office.

Generally, the think-tank reviews the economy twice a year, but did for a third time this year considering the present economic situation, said Dr Debapriya Bhattacharya, distinguished fellow of CPD, while presented the report before journalists. The first review was published in November and the second in March.

CPD said fiscal management in 2011-12 was put under serious pressure in view of the soaring revenue expenditure (32.5 percent in seven months) and mounting subsidy demand (Tk 40,000 crore). Lack of support from foreign and non-bank sources of financing also made the economic condition further critical.

The latest review report analysed four major issues – investment situation, employment generation, reform initiatives and crop production and food security – to understand the present economic conditions.

“A stagnating, if not faltering investment, is holding back the economy from achieving higher levels of economic growth,” said Bhattacharya.

Private investment came down to 19.1 percent of GDP this year from 19.5 percent in 2010-11, which was also focused in the World Bank’s economic outlook report released on Sunday.

CPD Executive Director Prof Mustafizur Rahman also spoke on the occasion attended by among others its research director Dr Fahmida Khatun.