Anticorruption drive hurts business activity: BB report

Dhaka, Dec 26 (bdprem.com) – The government's fierce drives against corruption and hoarding of goods have interrupted business activities, the central bank said in a report Wednesday. The annual report featuring the economic condition in fiscal 2006-07, however, said the economic activities would get a boost if the reforms outlined by the government saw a successful implementation. Your Ad Here "The Bangladesh economy maintained a strong growth despite disruptions in the domestic supply chains like political turmoil in the first half of FY 07, dislocation of market structure following anti-hoarding drive and crackdown on corrupt business houses and lower growth of crop production," the report said. The report said a congenial atmosphere and "a collective economic system" should be in place to woo more investment in the private sector, the prime mover of economic growth. The government and the Bangladesh Bank continued to adopt policies to support economic activities that contributed to achieving 6.5 percent GDP growth in the FY07, The growth was slightly lower than 6.6 percent of FY06, the report said. High inflation is a result of soaring prices of oil and some other imported goods on the global market, distortion in the supply side factors and demand pressure generated from excess money supply. "Slower import of consumer necessities pulling their domestic prices heightened the rice pressures," the report said. The annual average inflation increased marginally to 7.2 percent in June 2007, up from 7.16 percent in June 2006, while the 12-month consumer price inflation on a point-to-point basis increased over the same period to 9.2 percent, the report said. Total domestic credit grew by 14.5 percent, while credit to private sector saw a growth by 15.1 percent. The external sector witnessed a strong performance in FY07 with robust growth both in exports and imports, and increased inflow in remittances. In US dollar terms, export earnings recorded a growth of 15.8 percent, while the growth of import payments remained to a sustainable level at 16.6 percent. At the same time, remittances from non-resident Bangladeshis increased by 24.5 percent. The country's external current account balance continued to record a significant surplus with a substantial increase in remittances more than offsetting deficits in trade and services. A significant surplus in current account balance and a sharp rise in financial account surplus led to a sizeable surplus in the overall balance, which helped improve the international reserve position, the report said.