EMERGING MACROECONOMIC CHALLENGES
Bangladesh Economic Update, April 2013
The current issue of the Bangladesh Economic Update examines the macroeconomic challenges emerging in FY 2012-13, with an analysis on the elapsed four fiscal years under the current government by looking at the indicators mentioned at the Medium Term Macroeconomic Framework (MTMF).
The Update discusses the growth in Gross Domestic Product (GDP) and makes a projection based upon observable trends in the economy vis-à-vis the government target of 7.2 percent for the current fiscal. In doing so, it investigates into trend in saving and investment as well as effectiveness of monetary and fiscal policies of the government.
It also focuses on the fiscal balances including revenue income of the government, budget deficit, deficit financing and the implementation status of the Annual Development Programme (ADP).
Capital Market
Bangladesh Economic Update, March 2013
The capital market of Bangladesh is the third largest in the South Asia and one of the smallest in Asia. There are two full-fledged automated stock exchanges: Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE). After many years of operations of the exchanges, the Bangladesh Securities and Exchange Commission (BSEC) was established in 1993 to regulate the businesses of the exchanges, ensure proper issuance of securities and compliance with laws and protect the interests of securities investors.
The current issue of the Bangladesh Economic Update makes an attempt to understand the reasons for the continuous fall in capital market. The main reasons for failing to revive confidence amongst investors are due to non-implementation of commitments made to resuscitate the market, failure in taking actions against the individuals involved in the crash, lack of zero-tolerance in regulatory oversights. These have manifested in inadequate supply of liquidity in the market. After the crush in the capital market in 2011, a continuous fall in turnover is observed, indicating over the time short in supply of liquidity in the capital market. In FY 2011- 12, the turnover in DSE dropped to Tk. 117145.07 crore from Tk. 325879.77 crore of the previous FY of 2010-11, a rate of decreaseby 65.05 percent.
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INDUSTRIAL SECTOR OF BANGLADESH: STATUS QUO OR RE-VISIONING?
Bangladesh Economic Update, February 2013
The present issue of the Bangladesh Economic Update focuses on current situation of industrial sector in Bangladesh. The industrial sector calls for attention for a number of major challenges in recent time the sector faces, besides long-running neglect of addressing the structural bottlenecks in the backdrop of policy makers’ apathy of having strong and active industrial policy and the paradigmatic swing in favour of trade liberalization and export orientation.
Monetary Policy: Evidence Based?
Bangladesh Economic Update, January 2013
The current issue of the Bangladesh Economic Update focuses on the recently announced six-monthly Monetary Policy Statement (MPS) by the Bangladesh Bank for the second half of the current fiscal year of 2012-2013. This Update investigates into effectiveness of the prescribed policy instruments in attainment of three core objectives of the current MPS in light of past experiences. The assigned objectives of the central bank are: (i) limiting the domestic credit growth to levels consistent with the FY 2012-13 single digit CPI inflation target (ii) ensuring that productive growth-conducive activities are not hampered by access to credit and (iii) preserving external sector stability including building reserves to more comfortable levels. The central bank has dubbed the current half-yearly MPS as ‘balanced’ monetary policy. This is for the fourth time in a row the Bangladesh Bank has been pursuing contractionary monetary policy, though the central bank has variously styled those (e.g. ‘restrained,’ ‘balanced’ etc.).
