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Monetary Policy Statement (January-June, FY 2016-17): A Rapid Assessment

Monthly Bangladesh Economic Update, January 2017

January 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its rapid assessment of recently announced monetary policy statement for the second half of the FY 2016-2017 reveals that declining growth in private sector credit resulting in stagnant private investment and consequential unemployment especially of youth is likely to challenge the efficacy of monetary policy strategies.

The UO in its January issue of Bangladesh Economic Update 2017 cautions that without increasing the quality, mere growth in private sector credit by the targeted level – 16.5% for the second half of the current fiscal year – may prove ineffective in boosting private investment and achieving the target of growth in gross domestic product (GDP).

The think tank points out that private investment has remained stagnant and stood at 22.07 percent of GDP in FY 2014-15 and 21.78 percent in FY 2015-16, while increase in public investment from 6.82 percent in FY 2014-15 to 7.6 percent in FY 2015-16 has not succeed to create much needed crowding in for private investment.

 

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