Economic indicators are far from bright

Some of the vital economic indicators that have come to light of late are far from encouraging. The country's gross domestic product (GDP) has been projected to grow at 3.97 per cent by the end of this fiscal year. This is the slowest growth in the past 34 years excluding the year 2020 when Covid-19 had its heavy toll on the economy and its growth rate slumped to 3.45 per cent. Similarly, during the first 10 months of the fiscal year 25, the execution rate of the Annual Development Programme (ADP) was 41.31 per cent, marking the lowest implementation rate in the past 15 years during the period under scrutiny. That may, keeping with the tradition of a late spurt, albeit suspect, rise up to a higher percentage but obviously will fall far behind the hundred per cent target.

If these less-than-positive economic indicators are not enough, revelations made at a conference titled "Advancing Gender-Responsive Budgeting and FfD4 Outcome" further add to the discomfort. Here the acronym FfD4 in its full form is the Fourth International Conference on Financing for Development held in Seville, Spain from June 30 to July 3 this year. If the Seville conference focused on how to finance sustainable development and reform the international financial architecture, the one organised by the Citizen's Platform for SDGs, Bangladesh and UN Women Bangladesh sheds light on the impacts of a recessionary economy on women in particular. That it has been made worse by the external adverse developments including measly international investment climate is also a fact. An analysis by the think tank Centre for Policy Dialogue finds that as many as 2.1 million people lost their jobs in the first half of the current fiscal year. What is particularly disconcerting is that 85.7 per cent of them to have become unemployed are women.

 Now if the gender-biased job losses are read even against the low GDP growth that is likely to contribute a modest $12 billion to the $450-billion economy in the fiscal year 2023-24 to make the size of the economy $462-billion strong in the ongoing fiscal, a foreboding picture of women's empowerment emerges. At the same time, it also points to the economic malaise on account of gross gender disparity in economic participation. It proves to be a cruel irony when per capita income is set to rise from $2,738 in the previous fiscal to $2,820 in the 2024-25 fiscal year. When a large number of people, particularly women whose participation in economy and development misses the gender parity by a wide margin, become freshly jobless, it is a consequence of decline in various economic indicators or even retrogression in some sectors.  

To make the matter still worse for the interim government, the National Board of Revenue has failed to achieve the revised and down-sized revenue earning target by Tk 715 billion in the first 10 months of the financial year 2024-25. The revenue growth at a decelerated rate of 3.24 compared to the previous year during this period is unlikely to make a recovery in the remaining two months of the fiscal. So both the domestic and external sources of income show no sign of improvement. Had there been massive investment---both domestic and foreign, economic activities would gain momentum. But the country's political instability and lawlessness do not help the cause.

The rallying cry for a wide-ranging reform also is becoming subdued because of the interim government's lack of dynamic economic governance. In the absence of a bold and radical shift in economic management, even the leading economists who were involved with the task of preparing the white paper on the state of the country's economy expressed their exasperation. They have complained that the government has yet to act on the suggestions they made on a priority basis. Slight improvement in inflation and some stability in the foreign exchange market go to the credit of the governor of the Bangladesh Bank (BB). The central bank's tight monetary policy has made this possible but these are not enough to bring about a turnaround for the economy.

Meanwhile political stakeholders are becoming restive on the question of reform. Different political parties' views are now diametrically opposed to each other. This could be avoided if the interim government did not dilute its concentration to some needlessly controversial issues such as human corridor and leasing out the profitable Chittagong terminal to foreigners. Instead, it would be wise to announce a clear-cut roadmap for election without leaving room for confusion because of a tentative seven-month time gap between December and June.

If some much-needed economic reform agenda were initiated within six or seven months of the interim government's assumption of power, it would have its reflection by this time. Unemployment has already taken its toll and if the economy performs as it does now, more people will become unemployed. Even the better performing readymade garment (RMG) industry amidst the global gloomy manufacturing and business environment will soon lose its steam because of two vital inputs such as gas and power supply. The situation will be more challenging on account of US president's reciprocal tax now vitiating the global commerce and trade. Failure to reform the labour law has already given an edge to competitors of Bangladesh RMG manufacturers in Vietnam and Cambodia. There is no way Bangladesh will be able to take any advantage of diversion of manufacturing units from China. So the prospect of an economic turnaround is hardly bright, if not bleak.

nilratanhalder2000@yahoo.com