Bangladesh has to raise its investment in infrastructure to 10 per cent of gross domestic product from the current level of two per cent to accelerate its economic expansion to 7.5-8.0 per cent. The World Bank in its Bangladesh country partnership framework (2016-2020) to be handed over formally to the government next week strongly suggested to invest more in infrastructure sector. The country’s investment in the basic infrastructure is the lowest among South Asian nations, the Bank said. The CPF of the multilateral lending agency forecast GDP at 6.7 per cent for the current fiscal year, and 6.8 per cent for next year, provided calm political situation prevails in the country. ‘Bangladesh devotes a smaller percentage of GDP to investments than other countries in South Asia. Public investment in hard infrastructure stands at less than 2 per cent of GDP. Unless Bangladesh infrastructure bottlenecks are addressed, the risk is becoming increasingly important constraints for growth,’ said the CPF. ‘WBG (World Bank Group) estimates indicate that reaching sustained growth rates of 7.5-8.0 per cent would require an increase in infrastructure investments to around 10 per cent of GDP per year.’ The WB’s document said if sustainability prevails, the country’s strong domestic demand, gradually improving investment climate, and moderate single digit inflation would help raising GDP growth to 6.7 per cent in FY16 and 6.8 per cent in FY17. ‘Political instability and declining export competitiveness in European markets constitute the main risks in the medium-term. Especially the resurgence of prolonged and intense political instability would hamper private sector activities and threaten macroeconomic stability,’ reads the document. The CPE strongly recommended agriculture to perform well and agri-business flourishes, along with motivating people from agriculture to manufacturing sector and efforts for product and market diversification to achieve higher growth and create employment generation. To achieve these, problems like poor transportation and unreliable power supply should be addressed, the CPF said. Officials in the finance ministry said they were yet to receive the WB’s CPF formally. The concentration of the government towards large infrastructure projects keep on increasing every year, they added. The Bank in its ‘Global Economic Prospects’ in June forecast Bangladesh GDP growth for 2015-2016 at 6.3 per cent. The IMF last week upgraded this fiscal year’s outlook for Bangladesh’s economic growth to 6.8 percent from earlier estimate of 6.5 per cent, while Asian Development Bank last month predicted the growth at 6.7 per cent.
