IMF projects 6pc growth for FY11

IMF yesterday predicted around 6 percent growth of Bangladesh economy for the next fiscal year, but suggested that the removal of infrastructure bottlenecks and improvement in business environment can help log a higher growth.
The international lending agency, however, alerted that any unevenness in the global recovery and power disruptions might hurt the growth performance.
It pointed to the fact that a window of opportunity to attract more investment waits for Bangladesh as Asia, which is leading the global recovery, will attract capital inflows for the next few years.
“The question is how Bangladesh takes the opportunity. You have to start running because all other countries are moving fast,” said IMF Resident Representative Eteri Kvintradze.
Kvintradze unveiled its projections on Bangladesh at a press briefing at Bangladesh Bank, organised to share the IMF outlook on Asia and the Pacific region, which, for the first time, escorts the global economic recovery, spurred by export growth and resilient domestic demand.
The IMF said Asia will grow by about 7 percent and such a brighter growth prospects compared to the rest of the world is likely to attract more capital in the region.
“Resolving infrastructure bottlenecks and improving business environment could refocus investment spotlight in Bangladesh, help utilise comparative advantages of low labour costs, boost its productivity and put the country in faster growth gear,” the IMF official said.
“Accelerating regional integration will also be a significant contributing factor to strengthen growth performance,” added Kvintradze, referring to the linkages in areas of trade, transportation and infrastructure and private sectors.
The representative said Asian low-income countries (LICs) as a group are expected to grow around 6 percent in the near term. “Our projections for Bangladesh are more or less in line with the LICs,” she said.
The IMF expects a rise in Bangladesh's exports next financial year on higher demand in advanced economies. It also said the recent volatility in the financial markets in Europe might not hurt the demand for Bangladesh's main exportable item readymade garments in the EU zone.
Kvintradze also observed that inflationary pressure might ease slightly, expecting that there would be no sharp rise in the global commodity prices.
A stable macroeconomic policy stance will also help curb inflation, she added.
She further suggested that the FY 2010-11 budget should aim at raising tax revenue and accelerating ADP implementation pace to boost medium-term growth potential for faster poverty reduction.
“Prospects for broader revenue growth hinge on decisive actions to strengthen tax policy and administration,” said Kvintradze.