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State of Unemployment and Poverty

Bangladesh Economic Update, May 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.

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Recent Trends of Growth in Agriculture, Industry and Power

Bangladesh Economic Update March 2014 

MEU March 2014

The current issue of Bangladesh Economic Update attempts to understand the growth prospect in agriculture, industry and infrastructure sectors to explain the decline of growth in total gross domestic product (GDP). Agriculture and industry together comprise half of the GDP. As a result, the recent trend of these sectors is considered to be significantly associated with the expansion of economic growth.
The growth rate in GDP has declined from 6.71 percent FY 2010-11 to 6.23 percent in FY 2011-12 and then to 6.03 percent in 2012-13, which is projected to fall below the decadal average of 6.0 percent in FY 2023- 14.
The rate of growth of agriculture and its share in GDP is decreasing. The rate of growth in agriculture came down from 5.24 percent in fiscal year (FY) 2009-2010 to 5.13 percent, and then to 3.11percent and 2.17 percent in FY2010-2011, FY2011-2012 and FY2012-2013 respectively. This declining trend in growth of agriculture sector can largely be attributed to gradual loss of cultivable land, lack of invention, adoption and dissemination of new technology, and lack of sufficient support for agricultural research and training in the country..

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Revenue Collection, Public Investment and Debt

Bangladesh Economic Update February 2014 

MEU-Feb-14

The current Bangladesh Economic Update reveals that fall in growth in collection of revenue, rising per capita debt burden and shrinking public sector investment may contract expansion of gross domestic product (GDP). Accordingly, the Update finds out contribution of different sources of revenue and searches the pattern of expenditure. In addition, the Update probes into the matter of increased deficit in the budget of the government leading to slimming down of private investment on the one hand and retrenchment of development expenditure on the other hand, since the government borrows from abroad to finance deficit and has to repay the loan with large amount of interest payment that increases non-development expenditure and causes government to reduce its development expenditure.

There has been found a reduction in investment and growth for the successive three years from those of the preceding ones. In FY 2010-11, the GDP growth rate was 6.71 percent, which declined to 6.23 percent in FY 2011-12, and further fell to 6.03 percent in FY 2012-13.The Unnayan Onneshan (UO) anticipates that the rate of growth in GDP in the current fiscal may fall below the decadal average of six percent and may reach as low as 5.65 percent.

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Monetary Policy Statement (January - June, 2014): An Assessment

Bangladesh Economic Update January 2014 

MONETARY-POLICY-STATEMENT-

The present issue of the Bangladesh Economic Update focuses on the currently announced half-yearly Monetary Policy Statement (MPS) for the period of January-June of FY 2013-14, by the central Bank, Bangladesh Bank (BB). The Update examines the current MPS in the background of falling growth in private sector credit, which leads to lower investment demand, resulting in lower economic growth in the country for the last three years in a row. In addition, the Update explicates the issue of rising inflationary pressure in the economy as well as implications on the common people.

The rate of growth of actual disbursement of credit to the private sector in July to September, 2013-14 over July to September, 2012-13 were 10.18 percent, representing a 5.32 percentage point gap.

At the same time, the overall inflation increased (7.35 percent)0.2 percentage point in December 2013 (point to point basis)from 7.15 percent in November 2013, meaning the monetary policy has yet to be proved to be successful in keeping inflation at targeted level which was 6.0- 6.5 percent (base year 2005-06).

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Dynamics of Deficit and Debt

Bangladesh Economic Update August 2013 

MEU August 13

The current issue of the Bangladesh Economic Update unearths the ‘deficit and debt’ situation on the economy of Bangladesh. More specifically, the study addresses the crucial question of whether the existing ‘deficit and debt’ situation may reduce the capacity of the government to continue its investment in physical and social expenditures. The further dealing of the report is how the management of ‘deficit and debt’ through borrowing from external and internal sources could affect the economy of the country.

There exists a correlation between ‘Deficit and Debt’ whereas deficit must be financed by borrowing from external and internal resources to meet up the shortage. Deficit, however, as a share of GDP is estimated at only 4.6 percent in FY 2013-14, which is not that alarming. The actual matter in this regard, is the financial management for this deficit as well as the utilisation of the debt.

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