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A theory is appropriate as long as it fits into the fact; when a theory doesn't fit in the fact, it's wise to walk with the fact.

Sunday, November 21, 2010

Bangladesh Food Situation Report

The latest Bangladesh Food Situation Report (July-September 2010) clearly indicates that the food production target of the Government for FY2011 won't be achieved this time also. Also it reveals that between September 2009-September 2010, the nominal national average prices of rice and wheat have increased by 63% and 33%, respectively in the wholesale market! In the weekly retail market, prices of rice and wheat rose by 57% and 70%, respectively during the same period!


Sunday, November 14, 2010

Want to know the efficacy of monetary policy in Bangladesh?

If yes, who is able to explain the development on monetary policy and its consequences better than Professor M.A. Taslim? Please read this new piece on the efficacy of recent monetary policies, in which he questions the ability and honesty of the monetary policy authority as a credible institution.

Please don't miss it!

Thursday, November 11, 2010

Does Gold come back as new international currency?

As the World Bank President, Mr. Robert Zoellick suggests in the Financial Timesit might be time for a new international system of adjustable exchange rates that would use gold as a reference point for inflation and currency values. 

Coming from one of the most influential policymakers in the globe, does this make any reliable sense?

For those, who want to know the history of Gold as a currency standard, this link is useful. 

Fiscal austerity turns into violence

Fiscal austerity measures compelled the UK government to take a plan of trebling tuition fees and cutting university funding. The consequence is student violence, even in a developed country like England.  

Monday, November 8, 2010

Populist economic policies are no good!

The Financial Express in its editorial properly drew attention to the fact that economic populism creates economics policies that are either wrongly or poorly designed, framed and implemented! 

Would we be able to design policies that are not popular? When?

Sunday, November 7, 2010

Bangladesh improved in Doing Business rank!

The World Bank's 'Doing Business 2011' report reveals the improvement of Bangladesh's rank.

The Financial Express made an elaborate discussion in its editorial.

Thursday, November 4, 2010

Poor implementation increases development costs!

The Implementation, Monitoring and Evaluation Division (IMED) of the Planning Commission evaluated that the cost of development projects increased up to 149% in FY09 due to poor implementation performance in the Annual Development Programme (ADP)! Here is the news link. 

Who to blame for this massive loss in public resources?

New Stimulus for US Economy

Against rapid fiscal austerity measures in all over Europe, the US continues providing more stimulus packages to boost its fragile recovery. Here is the latest news on that:

Why Mr. Bernanke felt it right? Here is his own explanation:

Wednesday, November 3, 2010

Bangladesh Economic Update, World Bank

According to new World Bank Update on the Bangladesh Economy, the GDP growth of 5.8% in FY10 is noteworthy given the slow global recovery, severe power shortages, and labor unrest in the garments sector.

Main substances of the report:

Developments in FY10 

  • Growth was mainly driven by consumption demand (strong remittance inflows, rebound in construction activities; and growth in rural non-farm activities);
  • Inflation remained high and volatile due to continued volatility in food prices (The price of coarse rice in Dhaka in September 2010 was 50% higher relative to September 2009);
  • Exports and the terms of trade appear to have deteriorated due to slowest growth in readymade garments exports (1.2%) since FY02 arising from the global recession which caused a drop in retail sales in Bangladesh’s main export destinations.
Outlook for FY11
  • A higher GDP growth is projected to be 6.1-6.3% in FY11 because of the proposed higher public and private investment. However, this projection challenges the high growth target of the Government due to a weak global recovery which could dampen the recovery in exports and further slow down remittances and, of course, domestic energy shortages which pose the biggest threat to an increase in growth rates;
  • Fiscal pressures could grow in FY11 if food prices continue to rise

Tuesday, November 2, 2010

Banks' profit climbed up through stock business!

Ya, there is a news that banks's profit skyrocketed as high as 400% in the third quarter (July-September 2010) through mainly stock business!

Dear real sector, you cry for both having opportunity and more money!

Private banks need more deposit?

There is a news that a few private banks are going to rise interest rates in deposits with unchanged lending rates due to meeting growing demand for cash.

Obviously if it happens, the interest rate spread will decline, which will fulfill one of the expected long-term economic outcomes.

Yet, the question is why suddenly demand for cash in the private banks grows. The August 2010 data shows that excess liquidity in the private banks (including Islamic banks) stood up Tk.13,708 crore. What are the possible areas of lending by private banks? Stock market? No way!!!

Monday, November 1, 2010

Bizarre share price increase

Yesterday, the shares of Pharma Aids (a pharmaceutical company) jumped up by Tk.11,616 to Tk.18,580 (reduced from Tk.25,000 in the morning), an increase of 164% in one single day, after its 500% stock dividend declaration by the board of directors on October 28 (news on Pharma Aids)! This was the single most one day increase in the price of a share in the history of Dhaka Stock Exchange.

Another company, Chittagong Vegetable, which remained non-operational during the last couple of years, has announced 20% stock dividend. Right after the announcement (on October 28), yesterday  it shoot up by Tk.590 per share to Tk.2,499, an increase of 34% in one single day! On March 1, 2010, the price of Chittagong Vegetable was Tk.305 per share only - means within just 8 months, the price of this share increased by 719.3%.

Anyway, who bought these stocks?