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Bangladesh economic growth slows to four-year low

Updated May 17, 2013
This file photo shows Bangladeshi factory workers at work. - File Photo
This file photo shows Bangladeshi factory workers at work. - File Photo

DHAKA: Troubled Bangladesh's economy is forecast to have grown at a four-year low of 6.03 per cent in the fiscal year to June, more than a percentage point below the government target, officials said on Friday.

Analysts have said that a crisis in the disaster-strewn garment sector and a series of strikes could do lasting damage to the economy but Friday's forecast by the Bangladesh Bureau of Statistics (BBS) showed it is already in trouble.

The government had projected a 7.2 per cent growth in Gross Domestic Product (GDP) for the 2012-13 financial year, but a meagre two per cent expansion in the key agriculture sector means growth has fallen short of expectations.

It was the lowest growth since 2008-9 when the economy grew by 5.74 per cent, according to BBS, which is a government agency.

“We have estimated that the economy will grow at 6.03 per cent in the current financial year,” Satya Ranjan Mondal, a director of BBS, told AFP.

The BBS has also revised its final figures for 2011-12 growth downwards to 6.23 per cent from a provisional estimate of 6.32 per cent.

Mondal said manufacturing remained the main driver of growth, expanding by about 10 per cent despite the key garment sector being hit by a series of disasters that killed about 1,250 people in the current financial year.

“But growth in the farm sector, especially the crop output has slowed down to 2.18, although fisheries have done well,” he said.

Government officials have consistently said farm growth would remain sluggish as the small country is losing huge tracks of cropland to accommodate habitation and factories every year.

Most aid agencies have projected less than six per cent growth in the current fiscal year with the International Monetary Fund (IMF) saying that political unrest over the war crime trials of leading Islamists were affecting the economy.

The country was also hit by one of the world's worst industrial disasters last month after a nine-storey garment factory complex collapsed outside the capital killing at least 1,127 people.

A devastating fire also killed 111 garment workers in November, highlighting safety issues in the country's main industrial sector, which accounts for 80 per cent of its $24.3 billion exports and 40 per cent of its industrial workforce.

The building collapse triggered widespread unrest among textile workers, resulting in a temporary shutdown of the industry's main centre of production.

But Mondal said the impact had yet to be felt in the economy as the exports of garments were still expanding at a double digit rate.

“Given the global situation, we think we have a good growth,” he said.