Political uncertainty takes toll on Bangladesh's economy
Nov 21, 2006 - 6:26:46 PM
, Reviewed by: Priya Saxena
|
|
|
Bangladesh's prestigious research organisation, the Centre for Policy Dialogue, in its report on the Bangladesh economy said that the economic growth outlook for the fiscal year 2006-07 'seems to be a bit sober.'
|
By Indo Asian News Service,
[RxPG] Dhaka, Nov 21 (IANS) The growth rate of Bangladesh's economy is expected to be down by at least half a percent - thanks to political uncertainty, blockade of ports and street violence.
National and international organizations, including the International Monetary Fund (IMF) and the Asian Development bank (ADB), have lowered the projected gross development product (GDP) from an impressive 6.5 percent to six.
'GDP growth is forecast to moderate to 6.0 per cent in FY 2007, mainly reflecting political uncertainty over investment and business decisions in the lead-up to the general elections in January 2007,' the Asian Development Outlook 2006 said in a recent report quoted in the New Age.
'Moreover, the newly elected government will also probably require some time before embarking on substantive initiatives,' it added.
Analysts say this is a recurring phenomenon in Bangladesh during the run-up to each election when the political situation gets volatile and economic activity is affected by protest rallies and violence.
Since a caretaker government took office three weeks ago to prepare for the polls, Bangladesh has witnessed a political stalemate, violence that has killed 18 people, street demonstrations and blockade of ports and industrial establishments.
'Domestically, continued political confrontation and associated disturbances could adversely affect economic activity,' said the IMF in its country report made public last week.
'Political tensions continue to pose a potential risk to sound macroeconomic management and implementation of structural reforms,' the report said.
'Demonstrations, work stoppages, and a highly contentious political environment are likely to continue till January 2007 elections,' it added.
It also said that rising power shortage and delayed decision on power sector reforms may also hamper growth prospects if not addressed.
'Externally, further increases in oil prices and intensified competition in world textile markets represent the major risks,' it said.
The UK-based Economist Intelligence Unit, in its country projection, said that political uncertainly would slow down the growth rate to 6.2 per cent in current fiscal year from last year's 6.7 per cent.
'During election campaign, the long-standing rivalry between the two main parties - Bangladesh Nationalist Party and Awami League - may intensify,' it said.
Bangladesh's prestigious research organisation, the Centre for Policy Dialogue, in its report on the Bangladesh economy said that the economic growth outlook for the fiscal year 2006-07 'seems to be a bit sober.'
The Centre, in its report released in the first week of November, also said that economy would have to stabilise at lower equilibrium in the coming months hinting to the upcoming national elections as well as ongoing political instability.
|
Subscribe to India Newsletter
|
|
E-mail Address:
|
|
Feedback
|
For any corrections of factual information, to contact the editors or to send
any medical news or health news press releases, use
feedback form
|
Top of Page
|
