Containing rate of inflation within the target and accelerating investment would be the major challenges to the economy to achieve the desired growth as estimated for the current fiscal year. Centre for Policy Dialogue (CPD) executive director Prof Mustafizur Rahman yesterday picked the major concerns out of nine challenges as identified by an Independent Review of Bangladesh Development (IRBD) under a programme of CPD, a civil society think-tank. The interim IRBD review dwelt on the performance of major macroeconomic indicators during the first few months of 2009-10 as well as on the first year performance of the present government. Prof Mustafiz presented the overall economic situation on the basis of the IRBD review titled "State of The Bangladesh Economy in FY2009-10: From Stability to Accelerated Growth," at a press conference at the CPD dialogue room. He listed the other major challenges like stimulating the export sector, consolidating agriculture, maintaining fiscal balance, enhancing employment opportunities, combating climate change, increasing revenue and enlivening development administration. "It is possible to attain a growth rate of between 5.5 and 6.0 per cent in FY2009-10 if the government can successfully address some of the challenges…," he said. The CPD executive director said the rate of inflation remained at a lower level last year than the 12-month average of the previous year, but showed an increasing sign on point-to-point basis. "We'll have to remain cautious about the possible threat of inflation that would destabilise the macroeconomic stability." His concern emerged from the recent upward trend of food grain price in the domestic market simultaneously with the international market, amid a forecast of poor global agriculture output this year. He suggested continuing with the measures the government has already taken to help increase agriculture output and ensure food safety domestically instead of depending on the uncertain global food market. Prof Mustafiz stressed the need for finding ways to tackle the tension between the farmers and consumers that both the producers and the consumers could enjoy fair prices. He also emphasised on being cautious about a cumulative impact of increased remittance and excess liquidity in the money market on inflation. About accelerating investment as a means to stimulate economic growth, he said the government has a major challenge to ensure increased availability of energy while it will have to make bank credit more attractive for the investors. "Power and energy crises have become the 'Achillies' heel' for Bangladesh's industrial development," said the review. Prof Mustafiz expected that the exports that picked up in October would continue to increase in the coming months of the current fiscal year, but stressed that the stimulus package in this regard should be properly distributed. The IRBD identified nine positive developments during the first six months of the current fiscal. They are: overall macroeconomic stability at a time of global recession, highest production of food grains (rice and wheat) in Bangladesh's history, less inflation (general, food and non-food) than the previous year and relatively stable prices, robust income tax collection implies development towards more equitable society, capital market has successfully overcome the challenges related to market management, initiatives for energy management and planning for electricity generation and offshore gas exploration in the region, high growth in remittance inflow, and praiseworthy new initiatives taken in the education sector (such as primary education terminal examination, draft education policy 2009).
