Finance minister A M A Muhith sees containing inflation and gaining required skills to implement annual development project are the biggest challenges to the economy.

His comment came at a briefing at the finance ministry after a meeting with the prime minister regarding financial management and situation on Sunday.

The minister also said that prime minister Sheikh Hasina called for development of skills required for implementation of ADP after being informed that 29 percent of the project has been fulfilled in the first half of the current fiscal year.

The minister, in the meeting attended by planning minister AK Khandaker, prime minister's financial advisor Moshiur Rahman and others at the prime minister's office, presented details of the financial situation including foreign currency reserve, remittance, income from exports and expenditure for imports.

Muhith said Hasina was satisfied with the overall financial situation of the country. He said, "Prices of everything, including fuel and food products, are on the rise in the world market.

"The prime minister asked for steps keeping this in mind and strike a balance between supply and demand of the people to keep inflation at a tolerable level. She also urged for attention to rural economies including agriculture in the country's development."

"Other than this, the prime minister has asked for development skills of project implementation officers. She has asked to ensure favourable conditions so that foreign investors do not back off."

Responding to queries about the main challenges to the country's economy, Muhith said, "There are two major challenges, one is inflation and the other is skills required for project implementation."

He observed that the lack of workforce is the main problem in project implementation. "We lack skilled workforce in the administrative levels. There have been no appointments since 1982. This is the reason why foreign investors back out."

The minister said that a detailed picture of the country's economy has been portrayed to the prime minister. There will be a six percent rise in GDP this time. There was also rise in tax income in the first half of the fiscal year.

The minister continued that this growth will continue for the remaining six months of the fiscal year.

"In the first half 29 percent of the Tk 305 billion ADP has been implemented. In the last year it was 10 percent. An enthusiasm is being observed in project implementation. The prime minister asked for an increase in the speed."

Muhith claimed that the freeze in investment is melting and said: "The flow of loans in private sectors is rising. Imports of capital machinery are also increasing."

He also revealed that the foreign currency reserve is stable. "For a number of days, the foreign currency reserve is not increasing. A few days back, it rose to US $ 10.35 billion. Currently it has come down to US$ 10.13 billion, which indicates that import of capital machinery is rising."

"A fall in income from imports has been noticed in the first half of the fiscal year. It was US $ 6.1 billion in contrast to the US $ 6.55 billion of this time last year. But I strongly hope that it would be more than last year in the end of the year."

Finance secretary Mohammed Tareq was present during the briefing.

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