Higher growth hinges on political stability: ICCB
Bangladesh has to maintain political stability in the days to come for higher economic growth, the International Chamber of Commerce-Bangladesh said yesterday.
“The unstable political situation that has started from the beginning of the year will have an adverse effect on the economy if prolonged,” speakers said at the chamber's 20th annual council.
“We must, therefore, work together to overcome all hurdles and come out of the stagnant 6 percent GDP growth,” the trade body said in a statement.
Bangladesh economy, over the past decade, has maintained a healthy 6 percent-plus growth rate, despite global shocks, it said.
Sustained growth has generated higher demand for improved infrastructure, including uninterrupted power supply, better transport and telecommunication services, the chamber said.
All these require increased private investment, according to ICCB's executive board report.
In the budget of current fiscal, the government has set 7.3 percent growth target. To achieve the target, according to ADB, the total investment should be around 34.3 percent from the present level of 28.7 per cent of GDP.
The Manila-based lender blamed lower than expected level of investment as principal reason for growth deficit in Bangladesh, according to the report.
According to the World Bank, the economic growth would be supported this year and afterwards by continued robust remittances and recovery in private consumption demand, but political stability would be vital to its sustainability, the chamber said.
It has been observed by the trade body that Bangladesh is on the way to become a middle-income country by 2021; but to attain this, the country must increase its investment, GDP growth and industrial contribution to the economy.
The political unrest may deal a blow to the vision for becoming a middle-income country by 2021 as it will be difficult to increase the required industrial contribution of 35 percent of GDP, one of the important factors to achieve the target, the chamber said.
Five years ago, industrial contribution to GDP was 22 percent, but it rose to 28 percent last year. The per capita income, presently at $1,190, is going to reach $1,450 in 2021.
Investment is very important to achieve the middle-income status. Presently, GDP growth is 6.3 percent, which needs to go up to 8.5 percent.
The Council adopted the executive board report and audited financial statements of ICC Bangladesh for the year ended on December 31.
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