Bangladesh may not be able to achieve 7 percent GDP growth as projected since its recent economic indicators have been of major concern, according to the editorial of the International Chamber of Commerce-Bangladesh (ICCB) news bulletin released on Sunday.

The Balance of Payments (BoP) situation has deteriorated markedly in recent months, the editorial said.

The twin effects of surging import payments for fuel, goods and services as well as slowdown in remittance inflows in recent months have offset the large gain in export growth; contributing to a rapid deterioration of BOP situation and outlook. Besides, the tension in the money market has contributed to a significant depreciation of the exchange rate of taka against the dollar and other major currencies-by about 16 percent during the last few months.

The ICCB apprehended that international financial institutions and development partners, including the World Bank, IMF and ADB may not be able dole out credits and grants due to the ongoing economic crisis of the developed world.

“Therefore, appropriate policy measures and timely implementation of those are needed to generate enough own resources for sustainable growth, including increased foreign currency reserve.”

Referring to the just unveiled 6th Five Year Plan, it said the government plans to attain higher than 7 percent GDP, limit inflation within 7 percent, create 10 million new jobs as well as bring down poverty to 22 percent from present 31.5 percent during the plan execution period till 2015. The governments bank borrowing has already reached Tk 213.21 billion during the first five months, exceeding its target of Tk 189.57 billion for the current FY12.

On the other hand, banks have fallen into liquidity crisis for private sector investment. Commercial banks are borrowing money from other banks at a high interest rate to meet fund requirement, the ICCB news bulletin said.

It said Bangladesh still holds a much better prospect despite some disturbing signs as indicated above.

According to a study conducted by McKinsey & Company, on behalf of the German-Bangladesh Chamber of Commerce, Bangladeshs RMG exports will double by 2015 and nearly triple in the next 10 years as well as create employment opportunities for additional 3.5 million workers by 2020 in RMG sector alone.

According to industry experts, the target can easily be achieved by exploring new markets in growing Asia, Latin America and Africa. Besides, there are bright prospects of increased export earnings from pharmaceuticals, shipbuilding, leather goods and jute, and also increased manpower export.
It, however, said in line with Asian economies, Bangladeshs performance has so far been quite resilient to global economic crisis, achieving 6.7 percent GDP in FY11,although the world economy is indicating another slowdown due to dragging European debt crisis.

Bangladeshs macroeconomic performance was better than expected and regionally its performance had been one of the best, it said The European economy is expected to face the sharpest contraction in the history of the EU and, according to the IMF, the current GDP projects a slower growth for the next six years (2011 -2016) after a sharp fall in growth that EU is experiencing since 2007, it said.

Against this backdrop of the West, emerging Asia’s recovery and growth in the past three years has been exceptional and the IMF predicted, Asia as a whole will grow 8.2percent in 2010, which was more or less realized and 6.2 percent in 2011, the editorial said.

Developing Asia’s growth in 2011 was recorded at 9.5 percent and Asia, with a solid global market and a large pool of foreign exchange reserves, has proven to be the shining light in a gloomy and uncertain world economy, say experts.