Monetary Policy, Inflation and Liquidity Crisis
Bangladesh Economic Update, July 2011
The current issue of the Bangladesh Economic Update focuses on the recently announced six-monthly policy statement (MPS) for the period of July – December of 2011.
The report suggests that the policy instruments enlisted such as hikes of CRR, repo rates induce cost of capital, and thereby may dampen investment, by increasing the cost of capital as the banks borrow at higher rates. Therefore, the central bank’s expectation of reduction of pressure on liquidity may not be materialised...
Food Prices, Food Security and the Marginalised
Bangladesh Economic Update, June 2011
The price hike of essential food commodities has a major impact on food security particularly on the marginalized section of the society in Bangladesh. Recent rise in domestic cost of production of food, together with high price in international market may boost further food inflation, leaving adverse effects on the poor. Most of the poor spend more than half their income on food. Price hikes for essential commodities can force them to cut back on the quantity or quality of their food as well as change their consumption patterns. This may result in food insecurity and malnutrition, with adverse implications in both short and long term...
Macroeconomic Mazes in the Middle
A Rapid Budget Assessment of National Budget of 2011-2012
The national budget of FY2011-12 has been announced at the midpoint of the present government’s five years tenure, marred by challenges to maintain the balances and the achievement of the targets for which it was voted to power. The current situation of macroeconomic balances, particularly triggered by volatility of prices and contractionary monetary policies, may be further pressurised by the possibility of fiscal squeeze. These developments of maintaining the balances may put the government on the edge of achieving the target of growth, recovery from sluggish improvement in poverty alleviation and the reversing the rising trend of inequality.
Fuzzy Policy Façade: A Pre-budget Analysis of the State of the Economy 2010-11
Bangladesh Economic Update, April-May 2011
Policy induced externalities are creating multidimensional effects on various macroeconomic variables. The adverse effect of policy-induced externality is omnipresent in the economy.The economy of Bangladesh in the current fiscal year of 2010-2011 shows signs of mounting inflationary pressure, volatility in capital market and widening balance of payment. In the domestic front, there is hardly positive turnover in investment as it is hovering around 25 percent as a share of GDP over the last few years. The import bills have dwarfed the relative encouraging performance of export sector.
