Economic performance below expectation!

The Financial Express publishes a report on the performance of major macroeconomic indicators in FY12 and finds that most of the indicators performed below expectations. 

Here is the link of the report.   

Budget and its relation with IMF fund

Professor M.A. Taslim writes on the FY2013 budget announced by the government and tries to relate the content of the budget with conditionalities of IMF set for its $1.0 billion fund for Bangladesh.

Here is the link.

Garment orders fall...

Garment orders fall, especially from debt-affected Eurozone, as the cautious EU buyers are deferring or placing reduced number of orders due to a prolonged debt crisis there. Apart from a demand drop, the buyers are also offering lower prices. 


The news link on the issue. 

Arguments against new banks...

Professor M.A. Taslim writes against Bangladesh Bank's note supporting new banks. Finally, one macroeconomist speaks out on this issues; lets forget about the motive, but concentrate on the logic that he provided.

Here is the link.

India: An alternate export destination?

The Wall Street Journal reveals that the government of Bangladesh really expects increased exports to India to make up for slack demand from Europe and the U.S. for its textile output in the year ahead, as Finance Minister M.A. Muhith says. 


Is it possible? 


Here is the article from the Wall Street Journal.

Dismal export performance!

Exports fell for the third straight month in May due to a plunged demand for RMG items from debt-crisis-affected Eurozone, On a year-in-year basis, export declined by 4.1% in May. However, exports grew by only 7.0% during July-May FY2012 to $21.98 billion, 7.5% lower than the periodic target for the same period.

Question: Is the government still hoping to achieve the preliminary estimates of 6.3% GDP growth with this dismal export performance given the fact the performance of overall industry sector and service sector is largely dependent on export performance?

Link of the news. 

CPD's analysis on budget

Centre for Policy Dialogue (CPD) responses to the National Budget for Fiscal Year 2012-2013, proposed by M.A. Muhith, the Finance Minister.

Link of the initial report.

Budget for FY2012-2013

Finance Minister A. M .A. Muhith proposed a new budget for FY2012-2013 yesterday in the parliament. The following link is related with budget announcement and for your information only.

Link for Budget documents

Bangladesh Economic Update, World Bank (May 2012)

World Bank, Dhaka Office publishes its Bangladesh Economic Update (May 2012) using latest government statistics of GDP growth and others. It talks on ongoing macroeconomic challenges such as inflationary pressures, higher fiscal deficit and strained balance of payment situation.

Link of the report.    

Finance & Development, IMF (June 2012)

IMF publishes its June 2012 edition of Finance & Development with some wonderful articles.

Link of the publication.

Qatar's investment plan with BB

The government of Qatar proposed to invest its currency worth of $1.8 billion in the Bangladesh Bank (BB). If the proposal is accepted, it would be another milestone in the area of financial management of BB.

Link of the news.

Certain issues need to be considered before any decision:

• Though it is going to increase BB's foreign reserves level, however it should be considered as the liability of the central bank (debt burden);
• The agreement should include guaranteed clause for pay-back and repatriation clause should be clearly defined;
• Interest rate, if any, should be market based and internationally comparable;
• Profit-sharing (or, loss-sharing) clauses should be clearly defined;
• Long-run investment should be considered for using this amount, no short-run (like Quick-rental power plant) 

IMF support and its impact

Rejaul Karim Byron from the Daily Star writes on the possible impact of IMF conditionalities on the next budget, especially in the area of reducing subsidy and increasing tax-revenue target (and thus fiscal deficit). It's a good article to read with expert comments.

Link of the article. 

Time to change the path of monetary policy

Dr. Farashuddin Ahmed, Former BB Governor rightly pointed out that is the on-going contractionary monetary policy continues for a longer period, it will not support growth process of the country. Meaning? It's the time to change the path of monetary policy...

Though he said a number of good things on BB's performance which are logical, he was critical on some issues including lack of BB's monitoring system, especially in regards to Destiny-type issues (the same applies to stock market crash related issues too). He rightly talked on NBR's failure in checking under-invoicing of imported goods, income equality and narrow economic base.

Link of the report.

Stagnant GDP growth

During the last few years (nearly a decade), the GDP growth of Bangladesh has been centered around 6.0%. Though on several occasions, the government tried to touch or cross 7.0% growth target, it failed to achieve due mostly to perennial gas and power crises, poor infrastructure and political instability. Despite an estimated 6.3% GDP growth in the current fiscal year, the government set a target of 7.2% growth for FY13, though economists are skeptical about such target.

Link for an article on the issue.

Trade deficit widens

Country's overall trade deficit widens by 13.0% to $6.6 billion during the first three quarters of FY12.

Link of the news.