New monetary policy ‘not that much realistic’

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DHAKA: Economists and business leaders on Friday termed the monetary policy announced on Thursday was not that much realistic and said it would be difficult to bring down inflation below single digit and curb government bank borrowing with it.

They also said the central bank’s stance to slash credit flow to private sector would hurt investment which will subsequently shrink employment opportunities and scale down growth.

The central bank has set a target to bring private sector credit growth to 16 percent for the January-June period from previous 18 percent.

The credit growth in private sector was 18 percent in December, 2011 while it was 25.8 percent in the last fiscal year.

The experts also said the government expenditure in the remaining months of the current fiscal would scale up further due to poor ADP implementation rate in the first six months of the current fiscal.

The annual development programme (ADP) implementation was Tk 12,703 crore or 28 percent of the total outlay during the six-month period, according to Implementation Monitoring and Evaluation Division (IMED) statistics.

Talking to UNB, former finance adviser to the caretaker government AB Mirza Azizul Islam said, “Considering the ground realities, I don’t find this monetary policy that much realistic.