POST TIME: 18 August, 2017 00:00 00 AM
GDP growth to face roadblock
Countrywide flood

GDP growth to face roadblock

Natural disasters like floods are likely to impact the economy of the country this fiscal year and prevent it from achieving the targeted gross domestic product (GDP), said economists. It will tough to cross 7 per cent growth due to over flooding and slow export growth, they said. A former governor of Bangladesh Bank (BB), Dr Saleuddin Ahmed, said food prices will go up as a result of the floods across the country, as agricultural production has been hit badly. Not only that, supply has been affected in different businesses, including the transport and storage of products, he said.

Though the exact figure of the losses caused by the floods is yet to be revealed, its impact on different economic sectors will be huge, he added. The impact of the floods will be reflected in the overall economy this fiscal year, he said. “It will be difficult for Bangladesh to recover immediately,” he said.

He suggested that seeds and fertilisers be supplied to farmers to help them recover from the losses and to restore normalcy to economic activities after the floods.

Executive director of Policy Research Institute (PRI) DR Ahsan H Mansur told The Independent that though contribution of agriculture sector in GDP is very nominal. But the impact of losses of the agriculture sector is not negligible.

He however said time is still in hand to recover the losses of agriculture sector. But, the GDP target will not be achieved if the industrial sector or export growth will not increase significantly.      

The government has set a target of 7.4 per cent for the GDP growth rate for FY 2017–18. “The target of 7.4 per cent GDP growth is the highest in the last four decades,” finance minister AMA Muhith had said while placing the proposed budget for the 2017¬–18 financial year.

According to the Bangladesh Bureau of Statistics (BBS), the GDP growth rate stands at 7.11 per cent.

According to government estimates, crops like aus paddy, covering around 15,000 hectares in 30 districts, have been damaged by the floods, sources said. According to the Department of Agricultural Extension (DAE), a huge number of seedbeds of aman and a large number of vegetable fields have also been wiped out in the floods.

Over 341,000 farmers have been hit by floods in Sylhet division. Floodwaters have inundated ‘boro’ paddy on some 114,000 hectares of land in four districts of Sylhet. According to the World Bank (WB), agriculture plays a key role in Bangladesh’s economic growth. It is agriculture that is helping reduce poverty in Bangladesh, it has said. Agriculture is a major source of rural jobs in Bangladesh. Over 87 per cent of the rural populace earn from agriculture in some way or the other. However, two-thirds of rural households rely on both farm and non-farm incomes. Pro-poor agricultural growth has stimulated the non-farm economy of Bangladesh. A 10 per cent rise in farm income generates a 6 per cent rise in non-farm income.

The lead economist of the WB’s Dhaka office, Dr Zahid Hussain, told The Independent that it is clear that the impact of floods will be felt in FY 17, as crop production has been hampered badly.