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Bangladesh backtracks from its ambitious economic growth target as it takes a 'conservative approach' amid possible local and global shocks, analysts have said.
In its next eighth five-year plan (FYP), the government looks to expand gross domestic product (GDP) at an 8.5-per cent rate in the terminal fiscal year (FY) 2024-25.
In the Perspective Plan 2021, it set a target to the economy expand at a 10-per cent rate at the terminal FY 2021.
The development strategy was framed in 2010.
Meanwhile, the government has proposed to trim the GDP target in its macroeconomic framework in the next FYP to be implemented between FY 2021 and FY 2025.
General Economics Division (GED) is framing the eighth FYP as the current seventh FYP expires in FY 2020.
When asked on Tuesday, GED member Prof Shamsul Alam said, "We've taken realistic and pragmatic approaches in preparation of the next five-year plan."
As most local economic indicators are facing a bumpy ride amid a gloomy global economy, they consider a realistic target instead of an ambitious one.
As per the draft FYP, economy will grow at 8.2 per cent in FY 2021, 8.3 per cent in FY 2022 and 2023, 8.4 per cent in FY 2024 and 8.5 per cent in FY 2025.
On the mooted macroeconomic policy, Prof Alam said: "We haven't taken a conservative approach to the growth target in the eighth FYP. We've taken a pragmatic approach."
Meanwhile, the country's GDP growth in FY 2019 was buoyant as economy expanded at an 8.15-per cent rate.
Analysts say GDP growth has broken past records as it is on a steep rise even after entering into the "7.0-per cent growth club" three years ago in FY 2015-16.
Economy grew at the rate of 7.11 per cent in FY 2016, breaking the "6.0-per cent growth trap" after nine long years.
In the national budget, the finance minister set an 8.2-per cent growth target for FY 2019-20 aiming to take it on a higher trajectory within the next few years.
The GDP growth target is 0.05 percentage points higher than the 8.15-per cent final estimation in FY 2019.
According to the budget speech, the total GDP size may rise to $347.7 billion in FY 2020 from last fiscal's $301.9 billion.
Economist Dr Mirza Azizul Islam said except remittance, all macroeconomic indicators performed negative in recent months which must affect the higher growth target.
He welcomed the government's realistic decision on resetting the annual GDP growth target, backtracking from its "overambitious" approaches.
About revised ambitions, Dr Islam said despite being more pragmatic, it has some risks too following the lower base of private investment, foreign direct investment and vulnerable banking sector.
Prof Alam said they were going to frame the eighth FYP that will focus on more investment, human resources development and job creation.
"When private investment in the country will be lined up, I think economy will grow at the targeted rate or even more than that," he told the FE.
"Since big economies like China and India are performing poor and the US-China trade war has taken a new dimension, they could hit our economy too."
Many macroeconomic indicators of the country are also experiencing a rough ride, the GED member added.
"So, we tried to be pragmatic in preparing the eighth FYP to be started from FY 2021."
Prof Alam said the GED will finalise the development plan by June 2020.