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Macro-economic indicators sans inflation on track
Siddique Islam

          Despite the rising trend of inflation, the country's macro economic indicators during the first quarter of the current fiscal are on a steady positive course, according to the latest figures of the central bank.
Measures like incentives to boost export, improved facilities for increasing the flow of remittances through checking hundi operations have led to a sustainable foreign exchange (forex) reserve situation.
Revenue collection, export earnings and industrial production have all shown an upward trend during the period. But the rate of inflation stood at a level higher than that.
The rate of inflation on a point-to-point basis increased from 5.64 per cent of end-June last to 7.92 per cent at the end of October last mainly due to increase in food price index. The situation largely reflected the impact of devastating flood.
According to the Bangladesh Bureau of Statistics (BBS), the general index of the prices of consumer items rose to 6.21 per cent at the end of October, 2004.
The present trend of economic growth, giving positive signals, is welcome, Research Director of the Centre for Policy Dialogue (CPD) Mustafizur Rahman told the FE Saturday. But he expressed concern over the rising trend of inflation.
"The government should take immediate measures to curb the rising trend of inflation, otherwise the fiscal management will be hampered," he pointed out.
The government, he suggested, should take effective measures to keep the rate of inflation within the range between 5.0% and 6.0%.
Revenue earnings in October increased by Tk 836 million -- or 3.92 per cent -- to Tk 22.17 billion over that of Tk 21.33 billion collected in September last. This was also Tk 1340 million or 6.45 per cent higher than Tk 20.83 billion collected in October 2003. The annual target for revenue earnings during the current fiscal was set at Tk 321.90 billion.
A 19.04 per cent growth rate was achieved in export receipts in the first four month period -- July-October -- of the current fiscal over that of the corresponding period of the last year.
During the period, the country exported products and services worth $2.87 billion. The earning was $2.42 billion in the first four months of the 2003-04 fiscal. The export earnings also exceeded the target for the period by 2.43 per cent.
Exports of agricultural products, home textile and knitwear were reasonably up during the period as the earning thereof recorded 102.98 per cent, 43.84 per cent and 40.40 per cent growth respectively during the period, the Export Promotion Bureau (EPB) statistics showed.
The inflow of remittances in the first quarter of the current fiscal achieved a healthy growth of 13.84 per cent over that of the corresponding period of the last fiscal.
Remittances by the Bangladeshi expatriates aggregated at $1.40 billion in the first five months of the current fiscal, marking a 8.80 per cent growth over the level recorded during corresponding period last fiscal.
The record-level of remittance earnings in the five months of the current fiscal came as a continuation to last fiscal's positive trend in growth when total inflow thereof stood at $3.37 billion. The growth in 2003-04 was 10.03 per cent over the previous fiscal.
The country's forex reserve has already stood at $3.16 billion in the fist week of this month, largely because of a robust growth of remittances from Bangladeshis working abroad.
According to the statistics of the central bank -- Bangladesh Bank -- the outstanding amount of domestic credit expanded to Tk 36.31 billion -- or 2.89 per cent -- during July-October of the current fiscal. The corresponding growth was recorded at Tk 26.20 billion -- or 2.39 per cent -- during the same period of the previous fiscal.
The rise in domestic credit during the period was due mainly to the expansion thereof to the tune of Tk 44.22 billion -- or 4.67 per cent -- to the private sector, sources in the central bank said. The growth in private sector credit was, however, somewhat offset by Tk 6.32 billion or 2.88 per cent decline in government's net borrowings from the banking system.
Disbursement of industrial term loans at Tk 22.12 billion during the first quarter of the current fiscal. The corresponding figure for the same period of the previous fiscal was Taka 13.64 billion.
The central bank said the recovery of industrial term loans stood at Tk 21.48 billion during the period under report, showing a remarkably higher amount than that of the same period of the previous fiscal when an aggregate amount of Taka 9.64 billion was recorded on account of such term loans.


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