Bangladesh hopes to raise its annual GDP growth to 8 per cent in next three years based on assumptions that the domestic and global economy will bounce back from Covid-19 shocks and losses, according to an official document.

It also hoped that investment in social infrastructure and private sector industry will increase because of ongoing reform initiatives and various stimulus programmes.

According to an official document, the estimation of GDP for the running 2021-22 fiscal and the projection for 2022-23 fiscal are 7.2 percent and 7.6 percent respectively.

But, it said that to achieve the 8 per cent GDP in the 2023-24 fiscal would be a tough one with the ongoing public and private investment.

In 2019-20 fiscal total investment stood at 31.8 percent of the GDP where public sector contributed 23.6 per cent while private sector contributed 8.1 per cent.

For the medium term (2023-24) the public and private investment has been projected at 36 per cent where public sector will lead with 26.8 per cent while private sector’s contribution will be 9.2 per cent.

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The document said that the mid-term macroeconomic fiscal predicts that the growth would be 7.2, 7.6 and 8 per cent respectively for 2021-22, 2022-23 and 2023-24 fiscals.

It said that in the 2023-24 fiscal agriculture, industry and service sectors are expected to grow by 4.2, 11 and 6.9 per cent respectively.

"The (GDP growth rate in the medium term is forecast at 8 per cent based on the assumptions that the world and domestic economy will recover gradually from COVID-19 losses, and that investment in social infrastructure and private sector industry will increase because of ongoing reform initiatives and various stimulus programmes," the document said.

The GDP was 7.11, 7.28, 7.86, 8.15 and 5.2 per cent in 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 fiscals respectively.

The document said that the government implements public investment project in order to create the facility for achieving high economic growth as well as to encourage private investment having better infrastructure facilities.

In 2019-20 fiscal, total investment stood at 31.8 per cent of GDP where the contribution of private and public sectors were 23.6 per cent and 8.1 per cent respectively.

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"But this level of investment is not adequate to achieve around 8 per cent growth over the medium term," it said.

The key source of public investment is the implementation of annual development programme (ADP). 

"But due to low progress in ADP implementation, public investment has not been up to the expected level," the document mentioned.

It said that to increase implementation of ADP, the government has taken several reform measures such as simplification of fund release, procedure, etc.

"Considering the probable contribution of growth investment is expected to be 36 per cent of GDP in 2023-24 fiscal where percentage of private and public investment will be 26.8 and 9.2 per cent."

Regarding the inflation, it said that in the recent past inflation rate remained steady and modest, which is around the six per cent level. 

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Non-food inflation remained stable although it has shown an increasing trend at the beginning of the last fiscal year due to the increase of food prices. 

However, the document mentioned that satisfactory production in agriculture along with stable food prices would keep inflation well below six per cent in the running fiscal.

It said that the estimated inflation in the running 2021-22 fiscal is 5.3 while projected inflation in 2022-23 and 2023-24 fiscals are 5.2 per cent and 5.1 per cent respectively.

The inflation rate in 2015-16, 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 fiscals were 5.9, 5.44, 5.78, 5.5, 5.7 and 5.4 per cent respectively.