Dhaka, Sep 17 (UNI) The Asian Development Bank (ADB) today suggested restoring the shaken confidence of businessmen under the army-backed caretaker government, which has been a 'great challenge' for Bangladesh's economy, as some intractable economic factors apparently defied remedial measures.
''Economic prospect will depend on the caretaker government's success in maintaining political stability and broad public support,'' ADB said today in its latest appraisal of Bangladesh's socio-economic condition.
It appreciates the recent meeting between the caretaker government and businessmen as a very positive step for rebuilding the confidence, which is reported having been jolted amid the ongoing anti-corruption drive that landed a number of business tycoons in prison.
''But more steps should be taken to bring back the confidence of the business fraternity,'' ADB Country Director Hua Du said while releasing the bank's Asian Development Outlook 2007.
According to the multilateral donor agency, apart from confidence building, some other challenges Bangladesh may have to face in the days ahead include curbing inflation, raising revenue collection and upgrading infrastructures.
On political stability, Mr Du said, ''We see positive signs as the government laid out a roadmap for general election before the end of 2008.'' The ADB outlook, however, says ''the government has indicated its commitment to completing electoral reforms by end-2008.
Nevertheless, political uncertainty will prevail until new elections are held, slated before end-2008.'' Emphasising further adjustment of oil prices, the donor agency said it would alleviate fiscal stress.
On inflation, it said this might continue to rise since Bangladesh has to import its all essential commodities from the international market.
''This is imported inflation,'' ADB's chief economist on Bangladesh Mission Rezaul Karim said while making the presentation on the Outlook 2007.
He noted that frequent power disruption is affecting both production and service sectors.
About the regional economic performance, ADB Outlook says developing Asian countries will register solid economic growth in 2007, driven by fast growth in China and India. China's GDP growth was 11.2 percent, while India registered 9.3 percent in the first quarter in 2007.
The ADB observed that Bangladesh GDP growth remained robust at an estimated 6.5 per cent in the financial year 2007, propelled by rising domestic and external demands.
It also said the total investment, at 24.3 per cent of the GDP in 2007, declined by 0.4 percentage point compared to the preceding year's mark, on moderation in public investment following downsising of the annual development programme.