Risks in economy growing up
Al Amin :
Risk in the country’s economy is growing as the political confrontation is heating up centering the upcoming national elections to be held on January 7, next year.
Amid slowed economic activities in the country, agitation programmes like hartal and blockade are going on, which are affecting the economy.
The country’s net foreign currency reserves have declined to around 19 billion as the Bangladesh Bank is continuing to inject dollars in the markets.
According to the latest data from the central bank, the net foreign currency reserves stood at $ 19.60 billion till Wednesday. But, the usable reserve is less than $17 billion. The Bangladesh Bank has already injected over $5.5 billion in the current fiscal year.
Mezbaul Haque, Executive Director and Spokesperson of the Bangladesh Bank, said that the central bank is selling dollars in the market to meet import expenditures for the interest of the country.
Along with the erosion of foreign currency reserves, the supply of foreign aids has also decreased in the first quarter of the current fiscal year due to global recession and political crisis in the country.
On the contrary, the pressure of foreign loan repayments has increased significantly.
Economists apprehended that the economic crisis in the country will increase further, if the flow of foreign aids does not speed up. They also suggested the government becoming more cautious in using the foreign loans.
Dr Zahid Hussain, former lead economist of the World Bank Dhaka office, told The New Nation, “The country’s economy was under pressure and the ongoing labour unrest and political confrontation have added to the pressure, which is affecting the economy severely.”
“Although the impact of the labour unrest will not be permanent, the impact of the political confrontation is likely to be longer and wider. The impact of the political crisis, however, will depend on the reactions of the global development partners,” he added.
The current fiscal year started with a huge budget deficit worth around Tk 2.5 lakh crore and to realize the deficit, the government is dependent on loans from domestic and foreign sources.
Of the loans, the government planned to borrow worth over one lakh crore from foreign sources.
But the government received $ 128.17 crore in the first quarter (July-September) period of the current fiscal year, which is $8.23 crore less than the same period of last fiscal year, according to data of the Economic Relations Division of the Finance Ministry.
On the contrary, the government has to repay foreign loans worth $ 87.5 crore during the first quarter, which is $35 crore higher than the corresponding period of the last fiscal year, the ERD data showed.
On the other hand, over $100 million worth of garment work orders have been postponed because of the latest spell of labour unrest and vandalism in the country’s highest export earning sector in the last three weeks, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Certainly, an entrepreneur, who invests by availing bank loans and assuming real-time liabilities to run factories, would not certainly want to destabilise its workers or the buyers, the BGMEA said.
