Govt defers plan to reset GDP, export targets

The government has put off the decision of re-fixing the country's targets for economic growth and other macroeconomic indicators for the current fiscal year by three months.
The issue that the country would not be able to reach its gross domestic product (GDP) target of 7.2 percent in 2012-13 mainly because of a slowdown in exports was discussed at a meeting of the Fiscal Coordination Council yesterday.
The GDP growth could be around 6.5 percent in 2012-13, according to a government official who was present at the meeting.
Donor agencies, including the World Bank, the International Monetary Fund and the Asian Development Bank, have already forecast that the economy would expand by 5.8 to 6.1 percent this fiscal year.
They blamed the debt crisis in the eurozone and the slowdown in the USA for the country's bleak GDP growth prospects, as the two regions account for more than 70 percent of Bangladesh's exports.
The resetting of the major macroeconomic indicators is needed for better coordination of fiscal and monetary policies, the official said.
The coordination council meeting, with Finance Minister AMA Muhith in the chair, was also supposed to re-fix the export targets, which is projected to be growing at 16 percent this fiscal year.
This was the first meeting of the council in the current fiscal year. "We can take the decision after getting more data," Muhith said at the meeting, adding that there is no need to re-fix the targets now.
The minister briefed the council on the latest in the much-talked-about Padma bridge project. He said there is no problem in implementing the 6.15-kilometre venture worth $3-billion as its progress is on track.
The implementation of the annual development programmes, however, dominated the discussion, said an official of the finance ministry.
The government has set a target to spend Tk 55,000 crore for various development projects this fiscal year.
The performance of many ministries in executing the projects is not satisfactory, as only 12 percent of the ADP could be implemented in the first three months of 2012-13.
Many ministries only spent a miserable 1 or 2 percent of the funds allocated for them in the first quarter, said the official.
The council meeting was followed by a meeting of the resources committee, also chaired by Muhith.
The meeting was told that many ministries are putting pressure on the finance ministry to allocate them more funds to help them spend money for various purposes, including subsidies. The Finance Division, however, denied any fund requests beyond the budgetary allocation.