Central bank says 6.7% growth possible

Banglade­sh’s central bank said on Monday the economy could grow a record 6.7 per cent this year.

Bangladesh’s central bank said on Monday the economy could grow a record 6.7 per cent this year, but only if the government solves the country’s acute power crisis and ongoing labour unrest.

Last year, the global economic crisis led to nine months of export contraction, driving growth in gross domestic product (GDP) to a seven-year low of 5.54 per cent.

A recovery of exports could help Bangladesh clock its highest ever GDP growth of 6.7 per cent this year - up from a previous high of 6.6 per cent in 2005 to 2006 financial year - the central bank said in a statement on Monday.

The central Bangladesh Bank said this was dependent on the government getting 14 small power-generation units operational in 2010 as planned.

Years of under-investment in the power sector means Bangladesh now has a daily shortfall of around 2,000 megawatts of power, with rolling blackouts hitting the private sector, particularly manufacturing, hard.

The problem sent manufacturing growth tumbling to just five per cent last year - from record double-digit growth four years ago - as factories struggle with long blackouts each day.

Achieving 6.7 per cent growth also requires the “quick resolution of ongoing labour unrest in the export-oriented apparel sector,” the bank said in the statement. Ready-made garments for top Western brands make up 80 per cent of Bangladesh’s annual export earnings and employ some 40 per cent of the country’s industrial workforce.

Published in The Express Tribune, July 20^th, 2010.