All major economic indicators contributing to the growth of gross domestic product performed astonishingly badly in the first quarter suggesting the government has a tough task ahead trying to come close to its projections for the current fiscal year. Investment and expenditure to export and import performances, revenue collection and remittance to import of capital machinery and raw materials— were all in the red, according to a finance ministry report. Former finance advisor to the caretaker government AB Mirza Md Azizul Islam said the dismal performance in the first quarter suggests the projected seven per cent growth in the current fiscal year is now absurd. ‘Growing security concern among ordinary people and investors, coupled with political uncertainty, are the major contributors to the slowing economy,’ Aziz said. The report attributed the dismal economic situation to slowing Chinese economic growth, although it cited sliding prices of petroleum products and food items in the international markets as a blessing for the economy. Underlining the need for vigorous drive to collect revenue earnings, the report warned the low private sector credit demand and poor outbound shipment could be cause for concern with regards to economic expansion. ‘Slow growth in export earnings and tepid credit appetite from private sector remains a risk for the economy,’ reads the report. The projected GDP growth for 2015-2016 was set at seven per cent, while growth was 6.1 per cent in the previous fiscal year. The finance ministry in its report said credit growth in private sector during July to September period was 2.63 per cent, compared with 2.91 per cent a year ago, export growth was 0.83 per cent as against 0.88 per cent, import registered negative growth of 2.98 per cent during the period, and remittance in July to September registered a negative growth of 2 per cent, as against 22.65 per cent growth a year earlier. The report, citing the data of Bangladesh Bank, said letter of credit opening during the first quarter registered a 9.8 percent negative growth, L/C opening for capital machinery registered 6.95 per cent growth compared with 14.05 per cent year-on–year, raw material import registered a 1.43 per cent negative growth as against 12.22 per cent growth year-over-year. There is no positive sign in the investment situation, despite interest on loan being at 11.51 per cent in August this year, compared with 12.75 per cent last year. Revenue (NBR , non-tax and non-NBR) earnings during July-September was 0.6 per cent lesser than income generated during the corresponding period of the previous fiscal year, the report said. Expressing frustration, the report said annual development programme implementation during the first quarter was the lowest in last four years, as implementation was only 4.6 per cent as against 6.3 per cent a year earlier. ‘Revenue earning must be accelerated to boost investment and growth,’ the report underscored. ‘Ongoing reforms in the revenue sector are expected to boost revenue earnings in coming months.’ Amid the sluggish investment situation, sales of savings instruments shot up abnormally during July-September, causing a concern for the economy. ‘As the sale of savings instruments has shot up abnormally, the situation could weigh on the government’s interest expenditure,’ reads the finance ministry report. Aziz said the industrialists are unwilling to utilise their industrial capacity, let alone increase their production, which resulted in fall in L/C openings of industrial raw materials and capital machinery. ‘There is no quick fix for the government to mend the economic trend,’ he said.
