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Finance ministry to apprise PM of latest state of economy today

The Ministry of Finance (MoF) is set to apprise Prime Minister Sheikh Hasina today (Thursday) of the latest state of the country’s economy, particularly in relation to revenue-mobilisation performance, budget spending and investment scenario.Officials concerned hinted that the impact of the ongoing political impasse, especially on the revenue mobilisation and investment, might be highlighted in the presentation at a meeting.High officials of the four divisions — finance, economic relations (ERD), bank and financial institutions (BFID), internal resources (IRD) — under the MoF will make their respective presentations.Finance Minister AMA Muhith, State Minister for Finance MA Mannan, senior secretary of the finance division Mahbub Ahmed, ERD secretary Mohammd Mejbahuddin, IRD secretary and National Board of Revenue (NBR) Chairman Md Nojibur Rahman and BFID secretary Dr M Aslam Alam will be present at the meeting in the conference room of the MoF.Managing directors of the state-owned commercial banks and representatives of the central bank will join the meeting that will see detailed deliberations on all the indicators of the economy, which faces hurdles for the political hullabaloo.Ministry officials in and above the rank of additional secretary are invited to the meeting that will exchange views on key projects and future course of action regarding the economy.The four divisions under the finance ministry will make four separate presentations on their present activities, officials familiar with the process of arranging meeting told the FE Wednesday.Finance Division in its presentation is expected to portray the macroeconomic picture, focusing on the main drivers of the economy.The government in its annual budget has set a target of attaining 7.3 per cent GDP growth, which now has come under a gathering cloud of uncertainties.Many analysts and international funding agencies forecast a slight slide in growth target. The finance minister himself has also aired scepticism in view of the current spell of disruptive activities in the political arena. They feel that slow investment and sluggish economic activity under the impact of ongoing blockade might undermine the growth potential.Many of the international and local institutions in their GDP forecasts say that the target would not be attained mainly due to the less-than- expected scale of investment.The World Bank in its latest forecast said Bangladesh would expand at 6.2 per cent in the current fiscal. Bangladesh Bank, however, holds it slightly higher at 6.5 per cent.Many economists say the country now needs 4.7 ICOR (incremental capital output ratio) should it try to turn the economy at 7.3 per cent this fiscal year that is now halfway past.For this reason, Bangladesh now needs 34.31 per cent investment as a share of GDP. At present the level of investment hovers around 28 per cent of the GDP. The economists from the WB and local think tanks said the requisite investment is hardly possible to take place in the remaining five months, given the situation the country is now passing through.However, in the current fiscal year, total revenue is expected to pick up to 12.0 per cent of GDP (base 2005-06).This figure is about 16.8 per cent higher than that in the revised budget estimate of FY14 and about 29.2 per cent higher than the actual collection in the FY14.However, according to available statistics in relation to the July-December NBR revenue collection, it marked a Tk 20-billion shortfall in the first half of the current fiscal year.Three wings of the NBR collected a total of Tk 584.49 billion in tax in July-December period against its target for Tk 604.53 billion, according to the provisional figures found with the revenue board.However, this marks about 15.24 per cent growth in the first half (H1) against the last corresponding period.The IRD and the NBR are expected to focus the issue at the stocktaking meeting on the nation’s economic status.However, the finance division will also present the ongoing activities of its different wings, particularly its ever-increasing debt-servicing liabilities with different government organisations, including Bangladesh Power Development Board.Senior officials at the finance division said the PM’s visit to the MoF might give a fresh impetus to implementation of the ongoing development activities.It is expected that the PM might give instructions how to accelerate the GDP-growth momentum.She might also ask the MoF officials about quicker execution of government’s top-priority projects: the Padma Multipurpose Bridge, Elevated Expressway and the like.