Bangladesh is expected to head back to more than 6 percent economic growth this fiscal year, after a two-year spell of slowdown due to global recession and dipping exports, according to predictions of World Bank (WB) and Asian Development Bank (ADB).
The ongoing buoyancy in agricultural production and a robust growth in exports of major industrial products are likely to help Bangladesh attain up to a 6.7 percent rise in gross domestic product (GDP).
Over the past one year, domestic demand has been strong, supported by a vibrant rural economy where farmers have got a boost in their spending capacity due to high prices of agricultural produces.
A rise in wages, both in the public and private sectors, has kept the internal demand intact.
The government maintains that economy will expand by 6.7 percent by the end of the current fiscal year ending on June 30.
Multilateral lenders such as the WB and ADB say the size of Bangladesh economy will grow by 6.2-6.3 percent this year, widening the scopes for increased jobs opportunities, income and purchasing capacity.
The national statistical agency, Bangladesh Bureau of Statistics, is yet to finalise its preliminary estimate, its officials said.
In fiscal 2009 and 2010, economy grew by 5.7 percent and 5.8 percent respectively.
Between 2006 and 2008, the country clocked over 6 percent growth, according to Bangladesh Economic Review.
''Preliminary signs suggest better economic performances in all sectors this year,'' says the WB in its May 2011 release on Bangladesh economy.
However, economy faces some challenges -- inflation, liquidity dearth in banks and fear of a negative impact of low remittances amid ongoing crisis in the Middle East and North African countries.
Rising inflation, led by food prices, has already put increased strains on the household budgets, eroding the gains in people's purchasing capacity.
Higher food prices are likely to put an adverse impact on poverty reduction efforts.
The prospects of a rapid boost in investment and economic activities are plagued by the ongoing power and energy crunch, weak roads and port performances.
By solving the infrastructure constraints, Bangladesh can attain over 7 percent annual growth, say economists.
''There is no doubt about it. It is quite feasible. It's not a fantasy to achieve more than 7 percent growth,'' said Zahid Hussain, senior economist of the WB.
''But so far the outlook is 6 percent plus,'' said Hussain.
Since the beginning of the current fiscal year, growers have bagged a good output of rice during the immediate aman and aus season and cashed in on the higher prices of the staple and other food grains on the domestic and international market.
Favourable weather and a cut in the prices of fertiliser also helped the farmers have a good harvest of potato also.
The prospects of a bumper rice production in the principal crop season boro also look bright as the farmers maintained their enthusiasm to grow more to boost their income and purchasing capacity.
Except for a slump in the prices of potato after the bumper output, the growers also got better prices for other agricultural commodities -- vegetables, jute -- and shrimp.
Industrial activities have also picked up in the current fiscal year as the overall exports earnings surged. Imports of raw materials, intermediate goods and capital machinery also increased.
Exports surged 40 percent to $18.24 billion in July-April of 2010-11 from $12.94 billion a year ago, thanks to the recovery in the global demand after the recession. The rising labour costs in Bangladesh's competing countries extended support to robust growth in its exports of garment and textile industry.
Two other main sectors -- jute and jute goods and shrimp -- also fetched good export earnings.
The growth of remittance inflows slumped to 4 percent in the July-April period of fiscal 2011 from 16 percent in the same period the previous year. In 10 months to April 2011, inflow of remittance, which also provides an impetus to domestic demand, stood at $ 9.58 billion.
The ADB said the strong rebound in exports will support higher growth.
''The pickup in export-linked domestic industries and tax incentives for domestic industries provided in the FY2011 budget are also expected to bolster economic activity,'' said the Manila-based lender which predicted a 6.3 percent economic growth.
The ongoing buoyancy in agricultural production and a robust growth in exports of major industrial products are likely to help Bangladesh attain up to a 6.7 percent rise in gross domestic product (GDP).
Over the past one year, domestic demand has been strong, supported by a vibrant rural economy where farmers have got a boost in their spending capacity due to high prices of agricultural produces.
A rise in wages, both in the public and private sectors, has kept the internal demand intact.
The government maintains that economy will expand by 6.7 percent by the end of the current fiscal year ending on June 30.
Multilateral lenders such as the WB and ADB say the size of Bangladesh economy will grow by 6.2-6.3 percent this year, widening the scopes for increased jobs opportunities, income and purchasing capacity.
The national statistical agency, Bangladesh Bureau of Statistics, is yet to finalise its preliminary estimate, its officials said.
In fiscal 2009 and 2010, economy grew by 5.7 percent and 5.8 percent respectively.
Between 2006 and 2008, the country clocked over 6 percent growth, according to Bangladesh Economic Review.
''Preliminary signs suggest better economic performances in all sectors this year,'' says the WB in its May 2011 release on Bangladesh economy.
However, economy faces some challenges -- inflation, liquidity dearth in banks and fear of a negative impact of low remittances amid ongoing crisis in the Middle East and North African countries.
Rising inflation, led by food prices, has already put increased strains on the household budgets, eroding the gains in people's purchasing capacity.
Higher food prices are likely to put an adverse impact on poverty reduction efforts.
The prospects of a rapid boost in investment and economic activities are plagued by the ongoing power and energy crunch, weak roads and port performances.
By solving the infrastructure constraints, Bangladesh can attain over 7 percent annual growth, say economists.
''There is no doubt about it. It is quite feasible. It's not a fantasy to achieve more than 7 percent growth,'' said Zahid Hussain, senior economist of the WB.
''But so far the outlook is 6 percent plus,'' said Hussain.
Since the beginning of the current fiscal year, growers have bagged a good output of rice during the immediate aman and aus season and cashed in on the higher prices of the staple and other food grains on the domestic and international market.
Favourable weather and a cut in the prices of fertiliser also helped the farmers have a good harvest of potato also.
The prospects of a bumper rice production in the principal crop season boro also look bright as the farmers maintained their enthusiasm to grow more to boost their income and purchasing capacity.
Except for a slump in the prices of potato after the bumper output, the growers also got better prices for other agricultural commodities -- vegetables, jute -- and shrimp.
Industrial activities have also picked up in the current fiscal year as the overall exports earnings surged. Imports of raw materials, intermediate goods and capital machinery also increased.
Exports surged 40 percent to $18.24 billion in July-April of 2010-11 from $12.94 billion a year ago, thanks to the recovery in the global demand after the recession. The rising labour costs in Bangladesh's competing countries extended support to robust growth in its exports of garment and textile industry.
Two other main sectors -- jute and jute goods and shrimp -- also fetched good export earnings.
The growth of remittance inflows slumped to 4 percent in the July-April period of fiscal 2011 from 16 percent in the same period the previous year. In 10 months to April 2011, inflow of remittance, which also provides an impetus to domestic demand, stood at $ 9.58 billion.
The ADB said the strong rebound in exports will support higher growth.
''The pickup in export-linked domestic industries and tax incentives for domestic industries provided in the FY2011 budget are also expected to bolster economic activity,'' said the Manila-based lender which predicted a 6.3 percent economic growth.