The national output growth is likely to slow down in 2007, according to a report prepared by the ICC-B Executive Board. President of the Bangladesh chapter of International Chamber of Commerce Mahbubur Rahman presented the report at the Annual Council held at the auditorium of Dhaka Chamber of Commerce and Industry (DCCI) yesterday.

The report mentioned that the Asian Development Bank (ADB) has projected a 6.5 percent growth for FY07, which is moderately lower from 6.7 percent achieved in FY06. The Bangladesh Bank has also projected growth rate ranging between 6.5 and 6.8 percent. The central bank has, however, linked the growth rate with the favorable political environment and end of disruption to the economic activities.

The ICC-B chief in his report said Bangladesh needs stability for sustained growth and prosperity to match with other countries of the South Asian region. He said that Bangladesh economy experienced a mixed trend in the year 2006 due to political instability during the whole year. As a result, the economic indicators showed a sign of slowdown during the last quarter the year, he added.

He said the country would be indebted to this government for presenting a free, fair and credible election for bringing back much needed stability for sustained growth and prosperity. The report mentioned that the country has experienced a political stalemate towards the end of 2006, which ultimately led to the declaration of state of emergency. The business leaders took a number of initiatives during the year for bringing the mainstream parties into dialogue, however, unfortunately it did not bring any tangible results, the report lamented.

The businesses have appreciated the timely initiatives taken by the present caretaker government for bringing in political stability, reforms and reconstitution of the Election Commission and Anti-Corruption Commission, progress made in the separation of the judiciary, streamlining the administration, bringing the corrupt politicians and their cronies into task, the report said.

Mahbubur Rahman observed that despite all odds at the end of 2006, export earnings recorded a significant growth of 25.80 percent, while import growth moderated to 19.8 percent. At the same time, remittance from non-resident Bangladeshis increased substantially by 29 percent. The ICC-B report has also projected that in the coming days inflation will be a major challenge for the Bangladesh economy as rate of inflation is critical for accelerated economic growth and poverty reduction.

The continuous high global oil prices that have heightened pressure on the country’s balance of payment and threatened fiscal and monetary stability underscored the need for further rationalisation of domestically administered prices of petroleum products. It suggested that a pricing system providing for automatic adjustment of domestic fuel prices to international market situation be adopted.

The ICC-B council expects that the present government would expedite the process to remove infrastructural inadequacies, especially power shortage and sustainable improvement of port operations as well as its expansion. Immediate careful attention for modernisation of National Board of Revenue as well as Customs providing fiscal incentives, including tax holidays, to attract investment in basic industries, development of capital market, encouraging manpower export in a more organised manner and allowing Bangladeshi businesses to invest in the attractive overseas market by using part of their export earnings in order to arrest informal outflow of foreign exchange were also suggested.

Among others, ICC-B Vice-president Latifur Rahman, Executive Board members ASM Quasem, Annisul Huq, M Aminuzzaman, M Shamsul Alam, Mahbub Jamil, Mamun Rashid, Masih Ul Karim and Waliur Rahman Bhuiyan, and ICC-B members DCCI President Hossain Khaled, Rokeya A Rahman, Barrister Dr M Zahir, Barrister Rafique-ul Huq and Metropolitan Chamber of Commerce and Industry Secretary General CK Hyder attended the council.