Welcome to Applied Macroeconomic Centre

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.

Tuesday, November 29, 2011

Recipe for economic recovery!

Dr Sadiq Ahmed, Vice Chairman, Policy Research Institute writes on the economic strategies that the policymakers need to consider for reviving economic challenges that the Bangladesh economy is facing now. A thoughtful and organized one to read.

Here is the link.

Monday, November 28, 2011

We are the 99.9%!

Nobel Laureate Economist Paul Krugman writes on famous Occupy Wall Street slogan 'we are the 99.0%' and its actual implication in terms of growing inequality in New York Times. A good one to know how the income inequality in the US has been growing up over the years based on risk-taking financial instruments made by financial innovators. It is, of course, a lesson for the financial market of Bangladesh.

Here is the link.

Sunday, November 27, 2011

Power tariff rises!

The government raised the electricity tariff again for bulk consumers by 33.5%, on average, to reduce the subsidy in the sector after two recent hikes in February 2011 and August 2011.

Here is the news link.

1. To reduce the increased subsidy in the sector due to the purchase of electricity from the newly established high-cost diesel and furnace-oil fired power plants.

1. How does the government deal the system loss of electricity?
2. How does the government restrain its staffs working in the electricity sector not to be involved in system loss (or, corruption) and make various institutions profitable?

Thursday, November 24, 2011

Stimulus package for stock market!

The Securities and Exchange Commission (SEC) unveils a 21-point market stabilisation package, including a special scheme on compensating the retail investors who lost money to downswings and greater participation of banks and financial institutions in the stock market in the short term.

Here is the news on that.
1. SEC unveils 21-point stock market rejuvenation package
2. Small investors to get stimulus

Tuesday, November 22, 2011

Inflation update

Here is the inflation October 2011 update.

1. Although inflation, year-on-year, dropped slightly in October 2011 to 11.4% from 12.0% in September 2011, it still remains at a high level, compared with the previous records of Bangladesh.

2. However, annual average inflation keeps rising and moved up to 10.2% in October from 9.8% in September.

3. In October, food price inflation, year-on-year, rose; whereas non-food inflation declined.

অর্থনৈতিক সংকটের সমাধান

অর্থনীতিবিদ দেবপ্রিয় ভট্টাচার্য দৈনিক প্রথম আলো-তে বাংলাদেশের বর্তমান অর্থনৈতিক সংকট কাটিয়ে উঠতে কিছু জরুরী পরামর্শ দিয়েছেন। তিনি যেমন অর্থনীতির বিভিন্ন খাতওয়ারী ঝুঁকিগুলো ব্যাখ্যা করেছেন, তেমনি আবার সংকট কাটাতে সরকারের বিভিন্ন প্রাতিষ্ঠানিক ভুল পদক্ষেপগুলো আলোচনার তুলে এনেছেন।

এখানে লিঙ্কটা পাবেন।

সামষ্টিক অর্থনীতির বিশ্লেষন

১. প্রথম আলোর শওকত হোসেন এবং মঞ্জুর আহমেদ বাংলাদেশের সামষ্টিক অর্থনীতির বর্তমান সার্বিক অবস্থা নিয়ে 'অর্থনীতিতে অস্বস্তি' শিরোনামে একটা বিশ্লেষন করেছেন, যা আজকের প্রথম আলোর প্রধান খবর হিসেবে স্থান পেয়েছে। এটা খুবই ভালো একটা ব্যাপার যে, অর্থনৈতিক অবস্থার মৌলিক সমস্যাগুলো সবই এই বিশ্লেষনে এসেছে এবং গুরুত্বপূর্ন বিষয়ে বিভিন্ন সংস্থা যেমনঃ আইএমএফ এবং বাংলাদেশ ব্যাংক-এর মন্তব্যও সেখানে স্থান পেয়েছে। আশার কথা এই যে সবার কথা বলার ধরন প্রায় এক, কিন্তু যা  কিনা আবার নীতিনির্ধারকদের কথা ও চিন্তার ঠিক বিপরীতে।

এখানে প্রথম আলোর লিঙ্কটা পাবেন। 

২. প্রথম আলোর আরেকজন সাংবাদিক আসজাদুল কিবরিয়া সরকারের রাজস্বনীতি নিয়ে বেশ কিছুদিন আগে আরেকটা রিপোর্ট করেছেন, যা কিনা এখনো গুরুত্বপূর্ন। সরকারের রাজস্ব আয়ের সঙ্গে ব্যয়ের যে অসংগতি, সেটাই এখানে মূলত প্রাধান্য পেয়েছে। সরকারের রাজস্ব নীতি একদিকে মূল্যস্ফীতি উসকে দিচ্ছে - মুদ্রানীতি যথেচ্ছ ব্যবহার ও ভর্তুকি কমানোর মাধ্যমে -, অন্যদিকে দেশের মুদ্রানীতি ও আর্থিক ব্যবস্থায় চরম নৈরাজ্যের সৃষ্টি করছে।

এখানে আসজাদুল কিবরিয়ার লেখাটি পাবেন।

Monday, November 21, 2011

Excessive government borrowing

The amount of the government's borrowing from the banking sector crossed the entire year's target in just four months of the fiscal year 2012.
1. Spending on subsidy accounting for oil import to make quick rental power plant;
2. Shrinking external budget financing;
3. Higher budget spending compared to revenue;
4. Sales of savings certificates were lower than expected.  

Here is the news link

Sunday, November 20, 2011

Agonizing house rent!

An excellent report on skyrocketing house rents in Dhaka city in today's Daily Star. Thanks Mr. Helemul Alam for doing so with detail explanation of tenant laws.

Here is the link.

Friday, November 18, 2011

Farashuddin Committee, the Saviour (?)

The Ministry of Finance formed a five-member body namely 'Capital Market Advisory Council (CMAC)' with former Bangladesh Bank Governor Dr. Mohammad Farashuddin as its convener to save the country's capital market.

The other four members of the council are: (ii) former SEC chairman Faruk Ahmed Siddiqi; (iii) Supreme Court lawyer Anisul Haq; (iv) An army officer in the rank of Major-General; and (v) Joint Secretary of Banking and Finance Division of the Ministry of Finance.

Here is the news link.

I do understand the appointment of no. (ii) and (v) persons, but why they need to have no. (iii) and (iv)? Are they experts of capital market,  or do they represent any group that are closely related with the interest of capital market, or will they act like some sort of shield in future? Interesting choices!!!

Thursday, November 17, 2011

Oil Pressure

An interesting cartoon related to recent oil price hike, collected from the Weekly BUDHBAR.

Monday, November 14, 2011

Inflation projections

Prof. M.A. Taslim writes on the current states on the Bangladesh economy in his article 'Economic growth and the state of the economy' with special focus on inflation projections over the medium term.

Unlike the policymakers, I also believe with the last paragraph of his article:

"When inflation expectations become embedded, a substantial reduction in monetary growth will not have much immediate effect. It may take 12-18 months before a monetary contraction is reflected in price reductions. It would thus seem that the economy will suffer from inflation for at least a couple of years even if corrective actions are taken within a short time.  The high inflation could dampen the growth momentum of the economy."

Here is the link of the article.

Sunday, November 13, 2011

Fuel price hike: Second time in 2 months!

The government increased the fuel prices, the second time in 2 months, by Tk 5 a litre to reduce subsidy on imports of petroleum products.

News on the issue:

Wednesday, November 9, 2011

Development Asia, ADB

Asian Development Bank (ADB) publishes its half-yearly publication 'Development Asia', July-December 2011. You may find the Bangladesh context in two articles: (i) Catastrophic Costs; (ii) Tiny Loans, Big Questions.

Here is the link for the publication.

Sunday, November 6, 2011

IMF Report on Bangladesh

International Monetary Fund (IMF) publishes its IMF Country Report No. 11/314 'Bangladesh: 2011 Article IV Consultation.' You can find the latest Bangladesh macroeconomic analysis of IMF with outlook and risks, three short economic analyses, and, of course, joint World Bank-IMF Debt Sustainability Analysis.

Here is the link.

Wednesday, November 2, 2011

Column: Transhipment or transit for India?

Mr. Mahbubur Rahman, President of the International Chamber of Commerce (ICC), Bangladesh writes a column on the issue.

Here is the link for the column. 

Another International Advice!

The Financial Action Task Force (FATF), a global body to combat money laundering and terror financing, asks the Bangladesh government to scrap the existing money whitening facility offered to the country's stock investors.

Here is the news link. 

1. Without commenting on the effectiveness of such advice, did we ever gauge what we got after listening these? Did we able to improve our economic condition? Or, are we able to improve our economic condition without listening them?
2. How many countries are there in the world that constantly receive these sort of international advice? Are we too much lucky that we receive so many advice? Or, International agencies consider us 'stupid'?  

IMF Executive Board concludes 2011 Article IV Consultation with Bangladesh

On October 28, 2011, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Bangladesh.

Here is the public information from IMF.

Tuesday, November 1, 2011

Debate on new banks keeps going...

Dr. Ahsan Mansur, Executive Director, Policy Research Institute (PRI) writes on the issue and correctly points out the issue that Bangladesh doesn't need new commercial banks; and if it needs more banks or not, should be determined by the objective criteria, instead of political criteria.

Here is the article, published in the Financial Express.