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Exports are projected for higher growth in FY18: ADB

Updated on : 13-02-2018


Exports are projected for higher growth in FY18: ADB

Bangladesh's exports are projected to return to a higher growth and rise by 6.0 percent in FY2018 because of some measures including reduction in the corporate tax, expansion of export incentives and improving transport logistics, cargo handling at ports, and customs procedures, according to Asian Development Bank (ADB). 

"Exports are projected to return to a higher growth and rise by 6.0 percent in FY2018 and this projection is underpinned by favorable growth in major markets, a shift in market share toward emerging countries that are projected to see faster growth, a reduction in the corporate tax from 20.0 percent to 12.0 percent for the garment industry, expanded export incentives to cover new items, and government efforts to improve transport logistics, cargo handling at ports, and customs procedures," said the ADB in its Asian Development Outlook (ADO) 2017 published today. 

It said the import bill is expected to be higher by 10.0 percent in FY2018. Aided by duty reduction from 28.0 percent to 2.0 percent for rice, food grain imports are set to pick up to offset shortfalls in domestic production, it said, adding that petroleum imports will rise to run rental power plants as demand for electricity increases. 

Imports of machinery and raw materials for infrastructure and liquefied natural gas projects will increase the import bill, it said. 

The GDP is expected to grow by 6.9 percent in FY2018, unchanged from ADO 2017 but, because of weak domestic demand, slightly below the preliminary official estimate for FY2017, it said, adding that private consumption will likely stay at the current level as income growth slows in agriculture and wage employment and as remittances continue to fall.

Private investment will rise moderately with prevailing political stability and the authorities delivering economic reform and better infrastructure.

The decline in remittances will slow and is unlikely to reverse in the near term, the ADB said, adding that some pickup in export growth is expected, and there is potential for an upside surprise if consumer confidence improves.

Agriculture growth is expected lower at 2.6 percent in FY2018 because of a higher base effect and prolonged flooding that hindered planting for the monsoon crop. 

Industry growth moderate to 10.2 percent as falling remittances restrain domestic demand. Services growth will ease to 6.0 percent because of slower growth in agriculture and industry, the ADB said. 

The ADB said the government is implementing
several transport and energy infrastructure projects to leverage private investment: upgrading rural roads in the southwest; developing the Elenga-Hatikumrul-Rangpur highway in the northwest to four lanes for better connectivity with Bhutan and India; and constructing and upgrading electricity transmission lines to prevent power interruptions. 

The Bangladesh Investment Development Authority, se