Dhaka: Economic researcher Ahsan H Mansur has criticised the 8.2 percent GDP growth target set out by Finance Minister AHM Mustafa Kamal as “laughable” amid the fallout of the COVID-19 crisis. He also derided the target as “unrealistic” and “fantastical”, saying: “It is absolutely impossible.”

On Thursday, Kamal set out the Tk 5.68 trillion budget for fiscal 2020-21 in parliament, stating that he hoped the country would achieve an 8.2 percent GDP growth rate in the next fiscal year.

“I cannot understand the GDP target set out by the finance minister,” Mansur, executive director of Policy Research Institute, told bdnews24.com in his analysis of the budget.

“Where will this growth come from? Economists recommended the GDP growth target be set at 5-5.5 percent. They could have possibly set it at 6 percent at best.”
“This is simply laughable,” Mansur said. “Such a high target is unrealistic and fantastical. Everyone in the country is anxious and afraid of this epidemic. Everything is in chaos. Exports and remittances are down. Imports have cratered. It is uncertain how long this situation will continue.”

“What magic will bring the 8.2 percent growth?” said Mansur, a former economist of the International Monetary Fund.

In fiscal 2018-19, Bangladesh achieved a GDP growth rate of 8.15 percent. For 2019-20, the GDP target was set at 8.2 percent, an estimate which was later lowered to 5.2 percent.

The coronavirus epidemic and the extended period of lockdown left a significant impact on the economy.

Dr AB Mirza Md Azizul Islam, former adviser to the caretaker government, also cast doubts on the goals set out in the proposed budget.
Highlighting the World Bank's projection of a 1 percent growth in the world economy, he believes the government's target of 8.2 percent GDP growth is unrealistic under the circumstances.

“At most, the rate could have been 4 to 5 percent, but this level of GDP growth is not possible.”

“The tax revenue target is also unrealistic. It will not be possible to collect that much.”

He also warned that the private sector will be left devastated by the government's proposed borrowing target of Tk 850 billion from the banking sector to finance the budget deficit.

“If the borrowing target is that large then private entrepreneurs will not get loans. This could damage the investment climate of the country."

Selim Raihan, executive director of South Asian Network on Economic Modeling, questioned whether it was assumed that the economy will return to normal shortly while setting the growth target.
The time for resumption of full-fledged economic activities is in huge question as Bangladesh, along with the rest of the world, is witnessing surging cases of infection and deaths, he pointed out.

The pandemic has hit hard exports and remittances, key factors of Bangladesh’s economy, with negative growth in Europe and the US and oil price plunge in the Middle East.  

Raihan, a Dhaka University teacher, also said the revenue collection target is “not realistic” and achieving it will be “quite impossible”.

https://bdnews24.com/economy/2020/06/11/8.2-growth-estimate-is-a-laughable-idea-economist-ahsan-mansur