Print

External Sector: Current Trends

Bangladesh Economic Update, September 2014 

MEU September 2014The current issue of Bangladesh Economic Update attempts to understand the current status of external sector against the backdrop of existence of negative balance in service for a long time, decrease in remittance with fall in number of expatriates, large trade deficit and unsatisfactory inflow of Foreign Direct Investment (FDI) and the foreign aid in the country. 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 impede the growth rate of the economy. Inflows of remittance became negative in the last Fiscal year (FY) for the first time within ten years mainly because of the decline in labour migration to major markets like Saudi Arabia, UAE and Malayasia. 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. Increase in Import payments and export earnings cause decrease in trade deficit, because earnings from export grow more than that of import payment. Investment stagnation and the recent political contestations in the country, however may create an uncertain business environment as regards setting up new industries which will result in decreased investment demand-induced import of capital machinery and thus will further affect the trade balance.

FULL REPORT

ENGLISH PRESS RELEASE

BANGLA SUMMARY

Print

Monetary Policy Statement (July-December,2014): A Rapid Assessment

Bangladesh Economic Update, August 2014 

MEU August 2014The current issue of the Bangladesh Economic Update focuses on the recently announced half-yearly Monetary Policy Statement (MPS) for the period of July-December of FY 2014-15, by the central Bank, Bangladesh Bank (BB). The Update examines the current MPS in the background of three major economic issues – debt-financing-instrument-based (bank borrowing) deficit financing leading to higher inflation, presence of huge idle money in the banking system not coming into system as investment and the implications of both in affecting the national income. A review of the last five MPSs including the recent one announced by BB indicates that the targets set in the MPSs have been falling short, implying the lack of effectiveness and crisis of credibility in both formulating and implementing the MPSs. With a view to restraining the inflationary pressure and ensuring sufficient credit growth to stimulate inclusive economic growth, the central bank has recently pursued a monetary policy that keeps high policy rate along with higher cash reserve ratio (CRR).

FULL REPORT

ENGLISH PRESS RELEASE

BANGLA SUMMARY

Print

Banking Sector Caught in Trap

Bangladesh Economic Update, July 2014 

MEU July 2014The current issue of Bangladesh Economic Update analyses that the country’s banking sector is caught in trap, characterised by high rate of interest, excess liquidity and declining growth in disbursement of credit to private sector, intermediating lower investment, coupled with poor risk management, fraudulence, driven by captured governance and lax oversight, resulting in lower profitability to the shareholders. Besides this backdrop, questions are being raised concerning the far-sighted deregulation of the financial sector. Growth of credit in private sector registered at 11.46 percent in March 2014 over March2013 where it was12.72 percent in March 2013over March 2012 that indicates a 1.26 percent decrease witnessed at the same period in the previous year. Growth of credit in public sector has been observed a growth of 10.76 percent in March 2014 over March2013 compared to 8.71 percent in March 2013over March 2012, an increase of 2.05 percent.

FULL REPORT

ENGLISH PRESS RELEASE

BANGLA SUMMARY

Print

Long on Targets, Short on Realities

A Rapid Assessment of National Budget 2014-15 

Budget FY 2014-15

The current budget is tabled against the backdrop of three major economic challenges – decelerated economic growth due to stagnant investment, consumption financing fiscal deficit failing to augment the multiplier effect to overcome supply side constraints like inadequate infrastructure and decelerated increase in social sector spending – amidst raging strife between the ruling party and the parties in opposition.

The seeds of the present challenges have been palpable and have been articulated in a number of publications of Unnayan Onneshan (UO). More specifically, the organisation’s pre-budget annual publication on the state of economy in Fiscal Year (FY) 2013-14 clearly identified the reasons for fall in Gross Domestic Product (GDP) below the average rate of the last decade (Unnayan Onneshan 2014). The old problems have also remained unabated over the years, while new ones have been added as time elapsed. In the post-budget assessment of FY 2013-14, the issues of decelerated growth, squeezed investment due to fiscal composition and deficit financing, and implications of contractionary monetary policy have also been warned.

FULL REPORT

ENGLISH PRESS RELEASE

BANGLA SUMMARY

Print

Export, Import, Remittance and FDI: Recent Trends

Bangladesh Economic Update, April 2014 

MEU April 2014

The current issue of Bangladesh Economic Update attempts to understand the causes of declining growth in Gross Domestic Product (GDP) against the backdrop of recent underperformances in the external sector due to falling investment demand-induced decreased import of capital machinery, concentration of productive capacity in readymade garments and lack of production diversity in other exporting commodities, declining rate of wage earners’ remittance inflow and unsatisfactory inflow of Foreign Direct Investment (FDI) in the country.

External sector possesses upward trend in export earnings, despite slower rate of remittance inflow and import payments during the last fiscal year. Collapse in Rana Plaza and Tazreen Fashion, political instability challenged the export earnings to grow at a decreasing rate in recent years. However, despite these challenges, the growth in RMG sector can especially be ascribed to the increase in knit and woven garments. Moreover, export earnings increased more from non-traditional markets than that of the traditional markets.

FULL REPORT

ENGLISH PRESS RELEASE

BANGLA SUMMARY

Contact us

16/2 Indira Road, Farmgate
Dhaka-1215, Bangladesh
G.P.O Box #2251

Tel: (+88 02) 58150684, 9110636
Fax: (+88 02)  58155804
Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.