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The economy has to absorb a liquidity surplus of Tk 10,000 crore as it now awaits feasible investment opportunity or faces an inflationary pressure or capital flight in the near future. "The economy will have to face an inflation or a capital flight unless the surplus re-sources get the opportunity", Centre for Policy Dialogue (CPD) Director Debapriya Bhattacharya told a press conference at CPD office, releasing mid-term re-view findings on the economy on Tuesday. Although the country's macro-economic performance is still good, non-economic factors like law and order situation, corruption and politics of confrontation may hinder the pace of such economic progress, said the report of CPD, a local think-tank. In brief CPD in its findings" said the country's 2003 economy was good but "it is not good enough. Dr Debapriya also said, it was evident from the review that most of the key variables influencing macroeconomic performance have started off in a relatively strong footing. The CPD released the first interim report covering July-December 2003 on Tuesday in its office. The report revealed that revenue collection was on as targeted, export growth was stable and agricultural, production was steady. Positive movements are taking place in case of import growth, industrial loan disbursement, and financial sector reform it said. However, these reassuring trends are somewhat de-pressed by marginal growth in the manufacturing sector, a low level of foreign direct investment inflow, net out-flow of agriculture credit, transitory bubbles in the capital market, paralysis in the privatisation process, slowdown in remittance flow and last but not the least the noticeable price hike of essential commodities. The Executive Director of CPD also said that the fiscal balance remained sound mainly due to low ADP implementation and the balance of payment situation was subjected to some pressures because of the increasing trade gap and the expected pressures of input payments in the coming months. The report also identified four critical factors for successful implementation of the national budget. The four factors are: the implementation of ADP still remains the most vulnerable aspect of this year, economic programme and implementation of the Public Expenditure Review Committee recommendations and export diversification of new non-traditional exports. Private investment in the manufacturing sector gathered momentum, in the backward linkage industries. A successful supportive monetary and fiscal policy generated enhanced inflow of invisible surplus in the country's financial market the report noted. “Almost all major target indicators of the Mid-Term Macroeconomic Framework of the I-PRSP will be achieved" said Dr Debapriya. The report also revealed Page 15 Col. 8 Tk 10,000 cr that the country's economy is poised to record a 5.5 per cent or above growth in FY 04 and it is well known that a 5.5 per cent growth will result in little above 3.5 per capita income growth. It may not be good enough for improving the position of more than 40 per cent of the population living below the poverty line. It would also increase inequality in" the society it predicted.