Dhaka, Bangladesh (BBN)– The central bank of Bangladesh sees the ongoing political turmoil as a major threat to the economy as the country’s longest blockade in about two decades is disrupting economic activities and putting investors at bay.
Bangladesh Bank (BB) Governor Dr Atiur Rahman has feared a slow pace of economic growth in the coming days because of ongoing political unrest that has disrupted almost all economic activities.
The central bank chief expressed his worries while unveiling half-yearly Monetary Policy Statement (MPS) on Thursday for the second half of the the current fiscal year (2014-15).
Announcing the MPS, the BB governor pointed out that the country’s economy made a good stride over the last one year and was showing resilience with strong foreign exchange reserve, buoyant remittance and investment picking up slowly.
“But unfortunately, disruption due to political unrest has re-emerged, casting a shadow on such expectations,” said the governor hoping that peace and calm will return soon, enabling realisation of growth prospects projected earlier.
The governor pointed out a welcome trend of recovery in pace of investment and production activities in the first half of current fiscal and said this has strengthened optimism over GDP growth significantly exceeding the earlier projection (6.5-6.8 per cent) based on time series trend analysis.
“But unfortunately, the ongoing political violence has poured cold water on the prospects”, said the governor.
“The economy is bleeding. It (political violence) should be stopped immediately. Otherwise, the economy will suffer greatly”, he added.
According to the governor, imports have recovered from growth sluggishness of the past couple of years and current account Balance of Payment (BoP) has turned around to surplus from deficit. Imports picked up mainly because of more imports of capital machinery and production inputs.
When asked how long the buoyant foreign exchange reserve, now hovering over US$ 22 billion benchmark and can meet 6 months’ import bill, could be retained, the governor expressed his dismay.
“All these rosy pictures will go in vain unless good sense prevails on us,” said the governor stressing the need for immediate stoppage of all the ongoing acts of destruction.
While presenting the positive picture of economic activities over the last one year and projecting the future plans, the governor expressed his concern over the fallouts from the ongoing political violence.
This situation, he said, is putting hurdles to uninterrupted production and export-oriented activities. The turmoil has also extended further blows to businesses.
The BNP-led 20-party alliance has been enforcing the non-stop blockade with occasional and area-wise strikes across the country since January 6, following BNP Chairperson Khaleda Zia’s confinement at her Gulshan office in the capital Dhaka. Since then, most of business activities have been facing serious jolts with road transportation disrupted, especially on highways.
BBN/SSR/AD-30Jan15-9:57 am (BST)
