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CPD for adjustment of fuel price, exchange rate for economic growth

CPD for adjustment of fuel price, exchange rate for economic growth

DHAKA: Centre for Policy Dialogue (CPD) today said the government would require to focus on adjustment of fuel price and exchange rate, lowering the interest rate of National Savings Certificate (NSC) and offering better investment opportunities to diaspora and remitters to sustain the economic growth for the current fiscal year 2016-17 (FY17). “Private sector investment has witnessed a robust growth in the first six months of FY17 and to maintain this growth sustainable, the government needs to reform the banking sector, ensure the quality of investment in public sector and continue reforms at local government level,” said Dr Debapriya Bhattacharya, distinguished fellow of CPD, a civil society think tank, at a press conference here today.

CPD research fellow Towfiqul Islam Khan placed an analytical report on Bangladesh’s macroeconomic entitled “State of the Bangladesh Economy in FY2016-17” at the press conference. CPD executive director Dr Mustafizur Rahman, research director Dr Fahmida Khatun and additional research director Dr Khondaker Golam Moazzem attended it. Debapriya said it is needed to reduce the interest rate of NSC to bring down pressure on budget deficit which is on a rising trend now. In this regard he made three recommendations- adjustment of NSC interest rate, fixing limit of the purchase of NSC and beefing up monitoring so that none can purchase NSC using different identity. About the quality of public sector investment, he recommended taking more rational and effective steps in this regard by the government.

Suggesting adjustment of exchange rate in the upcoming monetary policy (H2), Debapriya said the inflation is now at a comfortable position. Now, if Taka is adjusted upward against dollar by taka 2/3 against dollar, the inflow of remittances will go up and at the same time, RMG exporters will be benefitted, he added. Debapriya suggested implementation of new VAT (Value Added Tax) law in phases, saying that more time is needed to implement it at field level.