Widespread political violence, strikes and shutdowns that battered Bangladesh's economy over the past six months could result in GDP growth falling below 6 per cent, a leading economic watchdog warned today.
Losses caused by political violence during strikes organised by the opposition between July 2013 and January 2014 has been estimated at 4.7 per cent of the GDP, Centre for Policy Dialogue (CPD) said in its latest report.
The watchdog forecast that GDP growth would range from 5.6 per cent to 5.8 per cent in fiscal 2013-2014 as the political turmoil has devastated the economy in the first six months of the current fiscal preceding the January 5 elections.
The Bangladesh Nationalist Party (BNP)-led 18-party opposition alliance organised protests, often violent, and enforced nationwide shutdowns in the run up to the polls.
They were demanding that Prime Minister Sheikh Hasina should step down and election should be held under a non-party caretaker regime, which were denied by the ruling Awami League government. The violence left around 200 people dead.
The CPD said losses due to violent shutdowns and blockades would be Taka 49,018 crore (with USD 1 equal to Taka 80), which was 4.7 per cent of the GDP of the last fiscal. It warned GDP would grow at a range between 5.6 per cent and 5.8 per cent in this fiscal.
The watchdog said the damages were calculated in terms of money taking into consideration 55 shutdowns and blockades enforced by the BNP and its ally fundamentalist Jamaat-e-Islami between July 2013 and January 2014.
"Bangladesh has lost its momentum to move to the higher growth trajectory following a record 6.7 per cent GDP growth in 2010-11. So, it will be a major challenge for the government to return to such a higher growth rate," CPD executive director Mustafizur Rahman said.
He said a number of indicators like inflation, ADP implementation, remittance inflow, investment and foreign aid utilisation continued to deteriorate in the first half of the fiscal while "most of the macroeconomic correlates showed either disquieting or stagnating trends as the economy suffered from political volatility".
But in a sharp contrast, Finance Minister AMA Muhith earlier projected this fiscal's GDP to be not less than 6.3 per cent, much lower than the target of 7.2, while Bangladesh Bank estimated it to be between 5.7 per cent and 6 per cent, International Monetary Fund 5.5 per cent, the World Bank 5.7 per cent and Asian Development Bank 5.8 per cent.
Prime Minister Hasina in her first meeting with foreign media days after the election had said the top priority of her Awami League-led government would be to put the economy back on track.
"But the most important agro sector and small and medium businesses that were equally affected due to the political violence is yet to receive any package," said CPD Distinguished Fellow Debapriya Bhattacharya.
