Any prognosis as to how an economy will perform has to take into account among other factors the political situation of that particular country. The caretaker government of Bangladesh makes no secret of its intention to see to the general election taking place in 2008 and the Election Commission seems determined to deliver on the promise. But this does not go much far to remove the uncertainty surrounding the shape and nature of the future government and its ability to ensure harmonious political cohabitation. In other words, although transition is in sight, stability is not. This is one reason why whatever optimism is there about the country's economic outlook for the year 2008 is mostly guarded.

Of course of more direct relevance are such factors as GDP, trade and investment, inflation and monetary policy. At present inflation is much too high-to the tune of 11%-and although export especially that of RMG is showing signs of picking up after a setback in the penultimate quarter of 2007, the apprehension about China's being a threat to our garment export cannot be said to be totally misplaced. FDI has stalled and so has domestic investment, the latter being commonly attributed to the low level of business confidence.

International factors that bear heavily on our economy include the cramped food market and the high price of fuel. One economist senses 'a world-wide famine syndrome' and points out its adverse impact on import costs. IMF and World Bank prescriptions are not always made in keeping with the realities on the ground, thus adding to the woe, allege some.

Figure: GDP Growth Rate

But economy has its intrinsic strength; it has resilience. Sidr and floods have done their part, and it is time for the economy to find a way out of the mesh. Necessity creates opportunity; very few people could have predicted the massive stature the garment industry has now grown into. The only problem with making an optimistic forecast is twelve months with no smooth passage may not be enough for the economic strength to manifest itself. So the projected growth of 6.5% may be much too high to achieve.