ADB: Look for new drivers of growth

The Asian Development Bank (ADB) said yesterday Bangladesh should look for new drivers of growth to shake off any further jitters stemming from global recession that has already affected the country.
For the impacts of the recession on investments and export-import, ADB forecasts that Bangladesh's GDP (gross domestic product) growth rate will go down to 5.5 percent this fiscal year from 5.9 percent in the previous year.
The Manila-based multilateral lender has also suggested the government should boost both public and private investments, bring a favourable investment climate, keep the domestic demand up and accelerate poverty reduction drive.
“Investment was sluggish and export performed poorly in the first half of the current fiscal year,” said the ADB in its quarterly economic update on Bangladesh for the October-December period released yesterday.
This quarter's report shows that growth in most of the indicators is nosediving, threatening the country's plan to go back to a more than six percent economic growth trajectory.
Export earnings declined by 6.2 percent during the first half of FY2010 (July-December), raising concern over the prospects of attaining the annual export target of $17.6 billion, higher by 12.8 percent compared to FY2009.
Exports of woven garments went down by eight percent and knitwear by 7.2 percent during the period because of reduced demand in the developed countries. Other major export items experiencing a decline are frozen foods, chemical products and leather. So, industrial sector is set to slow down to 5.6 percent from 5.9 percent a year ago.
Net foreign direct investment during the period was $197 million, a 67.3 percent decline from the same period of 2008.
A go-slow trade and weaker industrial performance have affected the services sector that is projected to grow at 5.9 percent compared to 6.3 percent in the previous year.