Eighth Five-Year Plan: Govt lowers first-year GDP growth target
The government has lowered the first-year growth target in its Eighth Five-Year Plan compared to its budget projections due to the ongoing Covid-19 pandemic, which forced the country to go into a lockdown that stalled its economy. Besides, recovery from the Covid-19 fallout has been partially mired by a second wave of infections worldwide. As per the Eighth Five-Year Plan, the government has set a target of 7.40 per cent GDP growth for FY21, which is 80 basis points lower than the budget’s growth plan of 8.20 per cent. However, the target still remains ambitious as it is much higher than the World Bank (WB) forecast. In its twice-a-year regional update, the WB projected 3.4 per cent economic growth for the next update, assuming that the Covid-19 crisis would linger.According to the plan, Bangladesh would post 7.70 per cent in FY22, 8 per cent in FY23, 8.32 per cent in FY24 and eventually 8.51 per cent in the final year of the plan period.The plan’s implementation will require Tk 64,959.8 billion in FY21. Of this amount, Tk 12,301.2 billion (18.9 per cent) would come from the public sector and Tk 52,656.6 billion (81.1 per cent) from the private sector. Planning Minister MA Mannan said the private sector would invest following the policy of the government. Out of the estimated Tk 64,959.8 billion, Tk 57,483.9 billion (88.5 per cent) is scheduled to come from domestic sources and Tk 7,475.9 billion (11.5 per cent) from foreign sources.
FBCCI pushes for extending loan moratorium
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has reiterated itsrequest for Bangladesh Bank to extend an ongoing loan moratorium until June.The rest of the loans making use of the moratorium, or in other words, against which repayment instalments are not being paid, should fall under the purview of the additional provisioning directive. Both platforms sought the measures sending separate letters to Governor FazleKabir on December 28, reasoning it was in the interest of borrowers and banks given the business slowdown caused by the coronavirus pandemic.The NPLs stood at Tk 94,440 crore as of September, down 1.74 per cent from that three months earlier and 18.73 per cent year-on-year, showed data from the central bank. Although this moratorium facility adversely impacted the loan recovery of banks, it caused their net profits to go up significantly, since it massively decreased the amount of provision needed to be kept against the NPLs. As per the banking rules, lenders are allowed to transfer the interest of the loans, which is yet to be realised, to their income books. This caused the net profit to become enlarged, soaring 33.60 per cent year-on-year to Tk 2,424 crore in the first half of 2020.Against this backdrop, the central bank asked banks to set aside an additional amount of around Tk 10,000 crore in provisioning to absorb shocks arising from the ongoing financial crisis. Lenders must keep an extra 1 per cent provision than what they now maintain for all types of unclassified loans, according to a central bank notice issued on December 10.
ADB to provide $200m for rural electricity supply project
The Asian Development Bank (ADB) would provide US$200 million funds, including $130 million concessional loans, to improve access to efficient and reliable electricity supply in rural areas of Bangladesh. Fatima Yasmin, Secretary, Economic Relations Division (ERD), and Manmohan Parkash, Country Director, ADB, remotely signed the loan agreements on Tuesday. The $200 million funds will be additional financing to the Rural Electrification Board (REB) for improving its transmission and distribution system. The additional loans will scale up the ongoing $616 million Bangladesh Power System Enhancement and Efficiency Improvement Project, which ADB approved in 2017, the Manila-based lender said in a statement. The additional $200 million loan will finance installation of an additional 990 kilometers (km) of 33kilovolt (kV) and 3,000 km of 11kV below distribution lines and associated facilities, including 51 units of 33kV/11kV substations in rural areas in Khulna division.
Edible oil prices on the rise
Summit Oil & Shipping Co. Ltd. (SOSCL), the largest private importer and supplier of fuel oil in Bangladesh, won the Local consumers now have to spend more on edible oil as prices are rising in the international market almost every week due to decreased production in exporting countries, weakening of supply chain and stockpiling amid the pandemic. Retailers say soybean oil prices in the domestic market have increased by anywhere from Tk 10 to Tk 15 per kilogramme the past month. Now bottled ones are selling for Tk 115 to Tk 120 per kg while that sold loose for Tk 110 to Tk 112. Retailers were found selling one litre containers of Rupchanda brand at Tk 120 to Tk 125 whereas it was Tk 110 a month ago. In case of its five-litre containers, the prices now range from Tk 580 to Tk 590 against a former Tk 520. Similarly, the prices of one litre containers of Teer, Pushti and other brands have jumped to Tk 113 to Tk 120 against a previous Tk 100 to Tk 105. For five litres it has gone up to Tk 570 from Tk 510.Soybean oil prices there rose by Tk 350 per maund (around 37.3 kg) to about Tk 4,180 to Tk 4,200. Similarly, palm oil now costs around Tk 3,600 to Tk 3,650 per maund, an increase of about Tk 275-Tk 300.Soybean oil price has risen from Tk 3,100 in several phases to Tk 4,200 per maund in the last four months. Similarly, the price of palm oil has also increased from Tk 2,950 to Tk 3,650 per maund.
Eastern Bank appoints two new DMDs
MM Haikal Hashmi and M KhurshedAlam have been appointed deputy managing directors of Eastern Bank. Mr. Hashmi was previously the deputy managing director, head of internal control and compliance and chief anti-money laundering compliance officer at IFIC Bank, where he had started his career as a management trainee.Mr, Alam had previously served as deputy managing director for retail and SME at NRB Bank.
SIBL opens five new sub-branches
Social Islami Bank Limited (SIBL) inaugurated 58th, 59th, 60th, 61st and 62nd sub-branches respectively in Marichcha Bazar, Jumchari Bazar of Cox’s Bazar, B Ed. College Road and Saltgola of Chattogram City Corporation and Churamon Kati of Jashore recently.