The economy of the country posted 5.8 per cent real GDP growth during the last fiscal (2009-10), which was largely internal-demand driven. In view of the internal and external sector developments, the 6.7 per cent real GDP growth targeted in the national budget of current fiscal is well within reach, according to the highlights of Bangladesh Bank annual report 2009-10.
In its near and medium term outlook for the current fiscal, the report said that the main near term risk is the persistent shortages of power and gas supplies, disrupting production in installed capacities and slowing down investments for new capacities.
It said that near and medium term growth prospects for the economy now hinge crucially on implementation of the government’s plan to eliminate energy shortages by adding as fast as possible new generation capacities with private and public sector
outlays.
“Significant external sector risk factors to medium term growth outlook include the recent declining trends in FDI and manpower exports.”
“Foreign direct investment inflows are likely to pick up in step with global growth recovery, but can be hastened by forging closer trade and investment ties with the fast growing economies in the East and South Asia, bilaterally as well as regionally.”
On the supply side for fiscal 2009-10, the report mentioned that the growth was underpinned by overall robust growth in the agriculture and service sectors accompanied by a modest growth in the industry sector.
It showed that the agriculture sector grew by 4.7 per cent during the last fiscal compared to 4.1 per cent in the previous fiscal (2008-09).  The growth rates for the industry and services sector were 6.0 and 6.4 per cent respectively in fiscal 2009-10 while 6.5 and 6.3 per cent respectively in fiscal 2008-09.
The Bangladesh economy maintained growth momentum despite deceleration in the export growth and investment initiatives, continuing with its resilient response to the global economic slowdown.
According to the report, the 12-month average Consumer Price Index (CPI) inflation rate increased to 7.3 per cent at the end of 2009-10 fiscal compared to 6.7 per cent at the end of fiscal 2008-09.
On the other hand, point-to-point CPI inflation rate stood at 8.7 per cent at the end of 2009-10 fiscal, which was 2.3 per cent at the end of fiscal  2008-09.
The 12-month average CPI food inflation rate rose to 8.5 per cent at the end of fiscal 2009-10 compared to 7.2 per cent at the end of fiscal 2008-09. Non-food inflation rate fell to 5.5 per cent at the end of fiscal 2009-10 as against 5.9 per cent at the end of 2008-09.
Money and credit developments:
The Bangladesh Bank pursued accommodative monetary policy stance during the fiscal 2009-10 with a view to promoting investment and productive economic activities and sustaining domestic demand against the backdrop of the global recession.
The broad money (M2) growth during the 2009-10 fiscal was 22.4 per cent, which was 19.2 per cent in the preceding fiscal.
The credit to the public sector declined sharply by 5.2 per cent during the 2009-10 fiscal compared to 20.3 per cent growth in the fiscal 2008-09. Reduced Annual Development Programme (ADP), higher revenue receipts and foreign grants and loans were mainly responsible for the fall in the credit to the public sector. 

News: The Independent/ Bangladesh/ jan-27-2011