The growth in GDP (Gross Domestic Product) in the next financial year (FY) would cross 7 per cent and the real GDP achievement will be nearer to 7 per cent in the current FY, Bangladesh Bank (BB) governor Dr Atiur Rahman said on Tuesday. He said Bangladesh's macro economy now is in the 'qualitative growth phase' and it is standing on better foundation resulted from multiple initiatives including policy support jointly by the government and central bank.
"Our growth is participatory and sustainable," Dr Atiur claimed at a roundtable discussion on "Financing Agro-based Small and Medium Enterprises (SMEs)" organised by apex trade body Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) at its conference room in association with BRAC Bank.
The governor said Bangladesh is likely to obtain the same ranking this year by the US-based Moody's Investors Service, one of the world's major global rating agencies which last year ranked Bangladesh as an emerging economy in Asia.
"Primarily, I have received indications that Bangladesh's ranking by Moody will not be downgraded this year. Vietnam was ranked above Bangladesh but the country likely to downgrade from its previous position," he said.
He said the rating is meant for Bangladesh's macroeconomic fundamentals were on better footing and it had less chance to encounter severe stress on
creditworthiness.
Terming the share market debacle and liquidity crisis as 'Growth Pains', the central bank governor in reply to a question by a discussant said, "Every growth has some pains and we must overcome the pains through patience and abiding by the rule of law."
"The prime concern of us right now is to create employment. We need 30 lakh employments every year to accommodate the jobseekers and only the manufacturing sector could play a big role in this regard," said the governor while commenting on flow of liquidity.
He said SME financing is important to create employment for elimination of income differences at the rural areas.
He said the central bank has achieved 65 percent of its total target to disburse agricultural credit for SMEs in the current FY. "The target this year was set to disburse Tk. 13,000 crore while the target last year was Tk. 11,000 crore," he said.
He said the country's agricultural sector is emerging as an industry. The central bank is in process to initiate several schemes for value addition to agricultural products by Asian Development Bank's association.
He also underscored the need to increase production of both the agricultural and industrial sectors in order to create employment. "We have to walk on both the legs. Agriculture and industry…..because manufacturing would play a big role to create employment," he said.
Regarding inflation, he said the central bank alongwith the government have been working together to keep inflation tolerable for poor.
"Inflation is the biggest enemy of the poor. We will pull it out and won't let it go up. Thus, we have to increase our manufacturing. The positive indicator is that our agriculture is once again likely to give us bumper harvest this year," he said.
He said Inflation in the neighboring country is high enough than Bangladesh. "Give us some time. I expect association from you (trade Bodies) all to step up with our own initiatives to control inflation," he said.
Speaking on rate of interest against industrial credit, Dr Atiur said the central bank as a regulator has limitations in curtailing the interest rate. "You have informed me about your concerns but I have limitations in this regard. However, it has creates a scope for mutual discussion in the coming days. Please send us notes of this meeting and I would discuss the issue with other high officials of the central bank and other banks to find way out what to do?," he said. He said, "The central bank, as a regulator, always played a role of a 'referee'. It couldn't play the role of an operator."
As chair of the roundtable, FBCCI president AK Azad expressed grave concern over uptrend of food price inflation.
"As latest reports till January, food price inflation reached 11.91 percent while non-food inflation was only 3.85 percent.
It is very disappointing," Azad told the meeting.
Azad has urged the BB governor to reintroduce the interest rate ceiling for industrial credit, taking into consideration the importance of expansion of the country's industry and investment.
"We cannot accept realisation of interest rate over 13 percent. Please, consider the demand of the business community as all of them are looking towards you," Azad told the central bank governor. "If needed, impose ceiling on the rate of interest for both the borrowing by banks and credit," he said.
The roundtable was addressed by joint secretary of agriculture ministry Md. Kaykobad, BRAC bank managing director Syed Mahbubur Rahman, FBCCI vice presidents Jashim Uddin and Mustafa Azad Choudhury Babu, FBCCI directors Abul Hossain and Golum Mostafa Talukder, BB general manager Sukumol Sinha Chowdhury, director of Bangladesh Chamber of Industries Priti Chatterjy, secretary of Bangladesh Fertilizer Association Abdus Salam Khan, former FBCCI president Akram Hossain and former vice presidents Dewan Sultan Ahmed and Abu Alam Chowdhury, among others.

News: Daily Sun/ Bangladesh/ 13-Apr-2011