Bangladesh needs to boost productive investment: IMF
Abrar Hussain: In its annual assessment of the economy, the IMF stressed that Bangladesh needs to boost productive investment by addressing ‘infrastructure bottlenecks’ and strengthening the banking sector in order to maintain the momentum in growth from low-income to a middle-income economy.
Daisaku Kihara, IMF mission chief for Bangladesh said that Bangladesh continues to generate strong growth at around 7% for 2018 thanks to consumer spending and investment, reports The Daily Star.
On how Bangladesh economy doing, Kihara said that growth in Bangladesh has averaged more than 6% over the last decade, significantly lifting per capita income, reports the Daily Star.
“Poverty has declined steadily and other social indicators, like gender disparity in education and maternal mortality, have also improved,” adding that the country has diversified away from an agrarian to a more manufacturing-based economy with rapid growth in the ready-made garment industry.
The IMF’s report also recommended boosting public investment in order to upgrade infrastructure such as roads and electricity coverage and spur more private sector activity to increase employment.
It added that current tax revenues in Bangladesh are low at 9% of GDP, and the country needs more revenues to finance infrastructure investment and social spending.
The average tax revenue to GDP ratio for non-resource rich, low-income countries is around 15%.
On the effect of Rohingya crisis on the country’s economy, the IMF Bangladesh chief said, “The economic and budgetary impact has been limited so far, thanks partly to the attention and financial support of the international community.”