Inflation, exchange rate causes for concern
From the last fiscal year's 6.94% to this year's 7.25%, growth does not seem unusual to me. Our economy is now recovering. The imports of capital equipment have increased a lot and the exports have grown exponentially.
This means that investments are being made, and economic activity is growing. Remittance has declined a little, but it got back up during this Eid.
Agricultural production was also good and industrial production did not fall too much. Private investment seems a bit high, although we have had capital equipment over the past year.
Due to these indicators, the growth we are being shown seems to be reasonable.
The International Monetary Fund (IMF) and the World Bank have already projected that Bangladesh's growth will be above 6% or near 7% in the current fiscal year.
In terms of growth, we have not yet been able to go back to the pre-pandemic state. But we will find out if this growth remains steady in the next financial year.
However, we need to focus on addressing some of the challenges of the coming year rather than worrying about the growth.
The challenges of the current macro-economy are very concerning. One of the concerns is inflation, which is on the rise. The other is that our current account deficit (CAD) has reached $14 billion due to soaring imports. Thus, I think it is difficult to manage the exchange rate while maintaining the reserve.
Besides, we have to be careful in debt management. If these issues are not addressed properly, we will face difficulties in the next financial year.
Meanwhile, the value of the exchange rate is being reduced. That is not enough. If we want to hold on to it, we have to release a lot of dollars in the market. But doing so will reduce the reserve again, which would not be a logical move at this point.
Overall, inflation, exchange rate management, current account deficit are causes for concern for next year. If growth is low, the macro-economy should be managed properly. Otherwise, we will be in danger.
Per capita income (PCI) is measured from all types of income in the country. Our per capita income will rise as it depends on GDP growth. However, the per capita income seems to be a bit high.
Dr Monzur Hossain talked to The Business Standard's Senior Staff Correspondent Saifuddin Saif over the phone
