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Monetary Policy Statement (July-December, FY 2017-18): A Rapid Assessment

Monthly Bangladesh Economic Update, July 2017

July 2017 MPS

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its rapid assessment of recently announced monetary policy statement for the first half of the FY 2017-2018 cautions that targeted private sector credit growth may fail to boost private investment in absence of a business enabling environment. Rising food inflation may further challenge the effectiveness of the policy.

The UO in its July issue of Bangladesh Economic Update 2017 fears that without increasing the quality, mere growth in private sector credit by the targeted level – 16.3 percent for July-December of the current fiscal year compared to 16.5 percent for the January-June of the previous year – may prove ineffective in facilitating investment-led employment generation and economic expansion.

The think tank points out that private investment has remained stagnant and stood at 22.07 percent of GDP in FY 2014-15, 22.99 percent in FY 2015-16, and 23.01 percent in FY 2016-17 despite significant increase in domestic savings from 22.16 percent in FY 2014-15 to 26.06 percent in FY 2016-17.

 

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