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PUBLIC INVESTMENT IN PHYSICAL AND SOCIAL INFRASTRUCTURE: AN APPRAISAL

MONTHLY BANGLADESH ECONOMIC UPDATE, JANUARY, 2016

MEU-January-2016The Bangladesh Economic Update  reveals that the low implementation status of public investment in physical and social infrastructure in the backdrop of continued sluggish private investment may hinder achievement of the targeted rate of growth in gross domestic product (GDP).  Taking account of five major sectors of public investment - roads and highways, bridges, heath, education, and social security and welfare - the research organisation evinces that the annual development programme (ADP) implementation status in these sectors became lower during July-December period of FY 2015-16 than the corresponding period of the previous fiscal year.   Taking account of the unsatisfactory quality of public investment in physical and social infrastructure and current state of sluggish private investment due to infrastructure shortage and lack of business confidence, the research organisation emphasises that the government must focus on stimulating private investment and ensuring effective utilisation of public investment in addition to channeling adequate resources into social sectors that give particular impetus to the improvement in human development.

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HALF-YEARLY ASSESSMENT OF BANGLADESH ECONOMY: TRENDS AND CHALLENGES

MONTHLY BANGLADESH ECONOMIC UPDATE, DECEMBER, 2015

MEU-December-2015The Unnayan Onneshan in its half yearly assessment of the economy for FY 2015-16 states that sluggish private investment, declining growth in revenue collection, and underperformance in external sector set inertia on the growth in gross domestic product (GDP). In addition to unsatisfactory trends in these major macroeconomic indicators, improvement in three basic dimensions of development – long and healthy life, access to knowledge, and decent standard of living – has not moved upward compared to those of other developing nations, as reflected in the Human Development Report 2015.    The think tank also points out that that structural bottlenecks in the forms of income inequality together with inequality in access to health and education, multidimensional poverty, and joblessness particularly among the youth are likely to put additional pressures on the progress of the economy.

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REVENUE MOBILISATION: TRENDS AND CHALLENGES

MONTHLY BANGLADESH ECONOMIC UPDATE, NOVEMBER, 2015

MEU-November-2015The Bangladesh Economic Update November 2015 reveals that declining rate of growth in total revenue collection since FY 2011-12 together with failure to achieve the potential of higher revenue mobilisation is likely to shrink development financing. Urging for increasing strength and effectiveness of the tax administration, the Unnayan Onneshan suggests that the government must administer its fiscal management in a way that would broaden the taxpayers’ base on the one hand and ensure the provision of necessary services to the citizens in return for their payment of tax on the other.

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External Sector: Recent Trends and Challenges

Bangladesh Economic Upadate, October 2015 

MEU Oct 2015The current issue of Bangladesh Economic Update attempts to understand the current status of external sector against the backdrop of trade imbalance, negative balance in the account of service for a long time, declining rate of growth in remittance inflow, unsatisfactory inflow of Foreign Direct Investment (FDI), and large gap between the commitment and disbursement of foreign aid in the country. The Update reveals that imbalance in the current account of FY 2014-15 compared to that of FY 2013-14 is likely to exert pressure on country’s balance of payments and thus on the trend in external sector. Overall external balance is showing positive balance because of inflow of one or two items in a huge amount, but decrease in remittance and export of manpower, increasing deficit in service and trade balance are likely to impede the growth rate of the economy. Inflows of remittance become negative in the last Fiscal Year (FY) for the first time within ten years mainly because of the decline in labour migration in major markets like Saudi Arabia and UAE. This declinig inflow of remitance is likely to exert adverse impact on rural economy since consumption and expenditure of people living in rural areas are largely contingent upon remittance sent by their household members living aborad.

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Debt and Deficit: Trends and Challenges

Bangladesh Economic Upadate, September 2015 

MEU September 2015The current issue of the Bangladesh Economic Update analysing the current trends in deficit and debt reveals that increasing per capita debt burden, high debt as percentage of gross domestic product (GDP) and large debt service payment lowering the capacity of government to increase development expenditure are poised to impede the economic growth and increase intergenerational debt burden in the future. Deficit as percentage of GDP is increasing which is not that alarming level but swelling every year can be menacing for the economic growth. The expenditure – both the development and non-development expenditure – is increasing but collection of revenue is not at desirable level to cover the expenditure. In order to meet up this gap, debt from domestic and external sources is mandatory. Debt is, however, common for both the developed and developing economies but success of a country depends on prudent use and efficient management of debt. In this regard, financing and managing the deficit in a best possible way becomes a challenge for the government. Debt may be considered as a fiscal stimulus which has a multiplier effect on economy if it is used for productive purpose otherwise the debt make the problem worse (Leech, 2012). The per capita debt burden of Bangladesh has been mounting rapidly since FY 2009-10, and debt as a share of GDP is high. A large amount of money is paid every year as a principle and interest to service the domestic and foreign debt which is decreasing the net asset of the country.

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