The government has projected to upgrade total investment in the country to 33.6 percent of the total GDP on the mid-term basis (in 2024-25 fiscal year) aiming to overturn the economic shock from the COVID-19 pandemic and the Russia-Ukraine war.
In this investment, the private sector will contribute 26.65 percent of the GDP while the public sector will contribute 7.0 percent. According to an official document, to attain the gradual acceleration of the GDP the private investment expansion is necessary along with public investment.
The estimated investment target for 2023-24 fiscal year is 32.8 percent with 25.91 percent from the private sector and 6.9 percent from the public sector. For the running 2022-23 fiscal year, the investment target is 31.5 percent with the private sector contributing 24.81 percent and the public sector adding 6.7 percent. The estimated GDP target for the current 2022-23 fiscal year is 7.5 percent while the target for 2023-24 and 2024-25 is 7.8 percent and 8.0 percent respectively.
The document stated that the GDP of the last 2021-22 fiscal year was 7.25 percent while in 2020-21 it was 6.94 percent. The growth in agriculture, industry and service sectors have been estimated at 5.0 percent, 8.8 percent and 7.9 percent respectively for the 2024-25 fiscal year. The official document said that About 7-8 percent real GDP growth is targeted over the medium term based on the assumptions of the gradual recovery of the world economy from the impacts of the COVID-19 pandemic and the early resolution of the Russia-Ukraine conflict.
The document put emphasis on private investment, saying that it needs to be boosted along with public investment to increase capital accumulation. Total investment in fiscal 2020-21 stands at 31.0 percent of the GDP where the contributions of private and public sectors are 23.7 percent and 7.3 percent respectively. “But this level of investment is not adequate to achieve around 8.0 percent growth over the medium term,” the document said. It also mentioned that public investment could not be increased to an expected level due to the lack of capacity in implementing the annual development programme.
Recognising this, the document stated the government has taken steps to bring about some structural changes at both project design and implementation levels. It mentioned that a potentially huge global supply shock that may reduce growth and push up inflation is affecting the post-COVID-19 recovery. “Russia’s invasion of Ukraine and the economic sanctions on Russia that followed put global energy supplies at risk,” it said. The document said that Russia supplies around 10 percent of the world’s energy, including 17 percent of its natural gas and 12 percent of its oil.
The jump in oil and gas prices will add to industry costs and reduce consumers’ real income, it added, saying that a record-high inflation is currently evident, which also affects Bangladesh. The total investment in 2018-19 fiscal year was 31.6 percent of the GDP where the share of private and public sector were 23.5 percent and 8 percent respectively. The investment in 2019-20 fiscal year was 20.8 percent of the GDP (private sector 12.7 percent and public sector 8.1 percent).
“But to attain 8 percent GDP in the mid-term basis” such investment is not adequate, it said. The document mentioned that the government has taken various reforms measures like simplification of the fund release process for accelerating the rate of ADP implementation. It mentioned that the overall agriculture sector, especially foodgrain, vegetables, livestock and forest resources was less affected due to coronavirus.
It said that disbursement of agriculture loans played an important role in the satisfactory growth of the agriculture sector.
