Bangladesh might not be able to achieve its GDP growth target for fiscal year 2021-22 as private sector investment in the country has fallen to its lowest in five years, Dr Debapriya Bhattacharya said on Sunday.
“Private investment decreased by 21.25 per cent in FY21, which is the lowest in the last five years. On the other hand, public investment has increased but the implementation of ADP has been hovering around 58 per cent in the last 11 months. Due to the Covid-19 situation, 80 per cent of the people were forced to cut food expenses,” noted Dr Debapriya, convenor of Citizen’s Platform for SDGs, Bangladesh.
He made the statement while addressing at a virtual media briefing – Delivery of the National Budget 2021 in the Context of the Pandemic: Ensuring Interests of the Disadvantaged People – organized by Citizens Platform Bangladesh on Sunday.
Commenting on the remittance inflow, Dr Debapriya, who is also a distinguished fellow of Centre for Policy Dialogue (CPD), said, “Remittance, one of the strongest part of our economy, will dry up in coming days as middle eastern countries are increasingly employing their own citizens. We see a negative trend in overseas jobs as the number of returnees surpassed the number of migrant workers going abroad. Remittance income flow was very robust in FY21, which was 36.1 per cent”.
On the recently announced monetary policy, he said, “Considering the excess liquidity in the market, the newly declared monetary policy is right. To increase the overall demand, more liquidity should be injected into the market. The decision to reduce interest rates was correct.”
However, he also criticized the monetary policy by saying, “The biggest weakness of monetary policy is that banks cannot reach the lending target set in the policy. The much-hyped theory that lowering the interest rate will boost investment is not right.”
Regarding the GDP target, he said, “GDP growth target for the fiscal year 2020-21 was set at 7.2 per cent, which was later revised to 5.2 per cent. The revised target will also not be sustainable as per the current scenario. However, the economy did witness some recovery in 2021.”
Survey on food expenditure
“We have recently conducted a survey on 1,600 households and found that 60.7 per cent of families had reduced their food expenditure as their income dropped sharply. Around 64.5 per cent people have reduced other expenses, along with the protein intake, by 48.2 per cent as they no longer can afford fish or meat on their plate” Dr Debapriya informed. “Some people now eat only one or two meals a day, instead of three. Meanwhile, 10 per cent of those surveyed have also reduced expenditure on baby food,” he added.
He also warned that “if they are not given direct financial and food assistance, these people will not only suffer from poverty and inequality, but their next generation will suffer from malnutrition along with physical and mental disabilities, which will be a big problem for the nation”.
According to the survey, the government had so far implemented 30 different types of incentives involving Tk 1,26,194 crore, of which only 17 were related to financial and food assistance while the remaining were by interest-based loans, he added.
Among other, the programme was also addressed by Advocate Sultana Kamal, Mushtaq Raja Chowdhury, Rasheda K Chowdhury, Shaheen Anam, Dr Iftekharuzzaman, Professor Mostafizur Rahman, Asif Ibrahim, among others.