Global recession starts to bite country’s economy:Muhit
Staff Correspondent

The global economic recession has started to bite Bangladesh businesses gradually posing threat to economic growth that was continuing for the last couple of years.
"The impact of recession is becoming visible gradually. It is slowly affecting all the sectors," Finance Minister AMA Muhith told newsmen yesterday after a meeting with a delegation from the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) at his office.
The BKMEA leaders informed the Finance Minister that exports from the sub-sector that witnessed robust growth for years registered a negative growth by 2.5 per cent in the first half of the current fiscal year while the trend of export orders shows no sign of bouncing back for at least next three months.
They said knitwear exports declined by 25 per cent in real term taking into account the annual growth of 22-25 per cent for last few years.
Muhit urged all to take preparation to face the challenge of recession. He expected that the first meeting of the proposed political committee on global recession would be held by the end of this month or early next month.
He said BKMEA had demanded increasing the cash incentive for the time being as a government support to overcome the challenge. "It needs to be reconsidered."
BKMEA sought enhancement of the existing cash incentive from 5 per cent to 10 per cent (in cases where local raw materials are used) and a fresh special incentive of 5 per cent on overall exports, irrespective of the source of raw materials, only for the year 2009.
Muhith, however, made an optimistic observation that the global recession is unlikely to be prolonged as the world is now more prepared to face such challenge with enormous reserve or liquidity, 25 per cent of the total global GDP.
He said the global financial crisis surfaced a bit late, as the United States did not want to recognise there was any problem. If it had been recognised at the beginning, the problem was unlikely to turn deeper into recession. "However, we've an advantage that we're almost insulated from it."
Replying to a question about the transit issue, the Finance Minister said: "It does not only mean movement of railway wagon from this side to the other, it also relates to other issues like sea port and movement to Nepal and Bhutan."
He said the existing bilateral trade agreement between Bangladesh and India expires on March 30, 2009. "It'll be renewed now without changing a single word."
Replying to a question on devaluation of Taka, Muhith said the government and its institutions will not intervene into the free-float market.
BKMEA president Fazlul Haque and other members were present during the meeting.