Fuel price cut will benefit economy: CPD

Leading financial watchdog Centre for Policy Dialogue (CPD) on Sunday suggested lowered petroleum price against the backdrop of the international market trend expecting the move to benefit the national economy.

"Domestic price of petroleum products have not been adjusted with the declining trend in the international price since January 2013 despite a strong demand from stakeholders," the think-tank said in its State of the Bangladesh Economy report for 2015-2016 fiscal.

Revealing the report CPD`s research fellow Towfiqul Islam Khan said the reduction of petroleum price only by 10 percent was likely to increase the country`s gross domestic product (GDP) by 0.3 percent, household consumption by 0.6 percent and apparel export by 0.4 percent.

Simultaneously, the report said, the price cut would lower the inflation rate by 0.2 percent.

The leading civil society think-tank in the report also suggested the government to launch major reforms in the arenas of banking, public expenditure management, private public partnership (PPP) and privatization to expedite the country`s move towards a higher growth trajectory.

It said the reforms in the four focused areas would be the key in driving the economy in the second half of current fiscal.

The CPD released the "State of the Bangladesh Economy in Fiscal Year 2015-16", under its flagship programme Independent Review of Bangladesh`s Development (IRBD).

CPD`s distinguished fellow Dr Debapriya Bhattacharya told the function marked to launch the report said despite the stability in the political front the country could not draw the expected investment in the past five months.

"The economy now witnesses stability but no dynamism," he said stressing massive reforms to woo private investment.

The report supplemented him saying the economy experienced relative macroeconomic stability in 2014-15 fiscal year, but further institutional reformation required to boost the economic growth and help achieve the government next development agenda of the seventh five-year plan.

The report reviewed the macroeconomic trends in last financial year, public finance, inflation and banking sector, export and import, power and energy and manufacturing sector.

CPD`s executive director Professor Mustafizur Rahman moderated the function also joined by its additional research director Dr Khondaker Golam Moazzem.

The report provided some specific recommendations for completing the annual development projects on schedule to enhance private investment.

The recommendations include formulating a taskforce for timely implementation of the projects, indentifying the project completion obstacle, improve the public procurement system and making parliamentary system more responsible for monitoring the timely completion of the priority projects.

The report also suggested setting up a `Financial Sector Commission`, which would prepare the guidelines and making recommendations for required reforms in banks and financial institutions, automation, risk-management, real-time scrutiny, checks and balances, in-built good governance mechanisms, internal control and role of various players in banks and other financial institutions.

CPD in the report also said that the farmers would enjoy the highest gain among the beneficiaries due to the introduction of the 20.0 percent duty on rice import as the local paddy price would increase 14.0 percent.