LDC graduation, SDGs to dominate economy’s course next decade
Bangladesh's graduation from a least developed country in 2024 and achieving the Sustainable Development Goals will be among the major aspects that will govern the economy's course next decade, said the International Chamber of Commerce Bangladesh (ICCB) yesterday.
"LDC graduation will bring a lot of new challenges, especially concerning losing trade preferences in major export destinations. There are also stringent and tough development goals that need to be achieved by 2030."
The economy of Bangladesh faced some headwinds in the last fiscal year because of lower exports and imports caused by shrinking global economic growth, it said in its quarterly news bulletin on Bangladesh economy for October-December.
The business organisation said with 8.15 per cent GDP growth in fiscal 2018-19, the country did not suffer any major setback.
"The growth has been possible as the country found new export markets, attracted a large number of foreign investors and invested in a variety of mega projects," it said.
The Bangladesh Bank forecasts an 8.2 per cent GDP growth in the current fiscal. However, the World Bank and the Asian Development Bank predicted it to be 7.2 per cent and 8 per cent respectively.
Bangladesh's export earnings in 2019 were $39.33 billion, up from $39.25 billion a year ago. Import payment was $59.09 billion against $60.49 billion in 2018.
As several mega infrastructure projects are underway, including the Padma multi-purpose bridge, a mass rapid transit system, an LNG terminal and several power plants and deep seaports, the government depends on bank borrowing to finance development programmes due to limited resource mobilisation, the ICCB said.
"The spike in government borrowings from banks has worsened the flow of credit to the private sector," the bulletin added.
The growth of flow of loans to the private sector slowed to 11.32 per cent in 2018-19 against a target of 16.5 per cent.
"Presently, banks are facing a liquidity crunch. This is mostly due to banks holding large amounts of non-performing loans (NPLs)."
NPLs accounted for 11.69 per cent of the total outstanding loans last June and many of these are due to willful defaulters, the ICCB said.
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