Alternative Growth Analysis?

Though the analysis in this article (GDP Growth Debate, by Ahsan H. Mansur) rightly captured the dynamics of output loss during the recent political conflict, however its assumptions look over-simplistic: the analysis unnecessarily gives more weights to the loss without considering the fast recovery effort by both public and private sectors. Also, all the happenings took place in H1 of the fiscal year, meaning the scope for considerable economic progress in H2. Whatever the analysis is, the 5.0% GDP growth projection is too less to agree. Anyway, alternative readings are always good appetite.  

Why agonise over economic growth?

The following article, wrote by Professor Anis Chowdhury (former Professor of Economics, University of Western Sydney, Australia), is a good read for people:

1. who blindly support higher GDP growth;

2. who don't support higher GDP growth;

3. who try to justify lower GDP growth by giving unnecessary country argument;

4. who don't see the long-run outcome of social investment.

Link of the article.

Keystone Quarterly Review

Keystone publishes its quarterly publication - Keystone Quarterly Review - with special focus on health care sector in Bangladesh, problems in state-owned banks, and resurging inflationary pressures.

Link for the report. 

Monetary Policy Statement, BB

Bangladesh Bank announced its half-yearly monetary policy statement without notable change in policy actions.

Link for the report.
Speech of the Governor. 

Macroeconomic Update by CPD

Centre for Policy Dialogue reports its flagship publication (Analytical Review of Bangladesh's Macroeconomic Performance in Fiscal Year 2014) with special focus on export and manufacturing sector, and their near-term prospects given the recent political development.

Link for the report.

Update on Macroeconomic Indicators

IMF issues update on selected macroeconomic indicators of the Bangladesh economy through simple graphical representation. One may like to have clear understanding about the current macroeconomic condition and the interrelationship between variables while going through this.

Link for the update. 

Target Monetary Programming of BB: M2 vs. M3

Habibur Rahman writes on the effectiveness of M2 and M3 in the monetary programming of Bangladesh Bank (BB). In precisely, he examines whether the use of M3 instead of M2 in the BB's monetary programming would provide any better outcome in terms of: (i) explaining CPI inflation and (ii) reducing errors while targeting monetary growth.

Link for a report on the paper.   

IMF Staff Report on Bangladesh

IMF publishes it staff report on Bangladesh, which, among others, incorporated some thematic economic stories (inclusive growth, opportunities and challenges on RMG sector and fiscal risks of the economy). This is quite interesting that IMF also talks about the issues of inclusive growth.

Link of the report.   

Profile of Peter Blair Henry

Finance and Development, IMF profiles Peter Blair Henry, Dean of the Leonard N. Stern School of Business at New York University (NYU). Peter is the most youngest dean in the 113-year history of the school, an economist and a policymaker.

Link of the profile.

Who saved the rupee?

Arvind Subramanian from the Petersen Institute of International Economics writes on the recent fall of the rupee and its recovery later. Interesting conclusion! 

Link for the article.

WB Development Update on Bangladesh

World Bank publishes the Bangladesh Development Update (October 2013) with the following key points:

The GDP growth in FY13 decelerated, for the second year in a row, to six percent.

The most pressing challenges lie in rebuilding the image of the garment sector, removing supply bottlenecks and maintaining economic and financial reforms.

Global risks to the economy have receded, only to be off-set by internal risks, which have grown in stature.

Link of the report.

IMF concludes 2013 Article IV Mission

International Monetary Fund concludes its 2013 Article IV consultation mission and third review under ECF agreement with the Bangladesh government and, as always, provides its comments on the overall macroeconomic development and structural policies.

Press Release of IMF 

Asian Development Outlook 2013 Update

Asian Development Bank publishes its flagship publication 'Asian Development Outlook 2013 Update' with a focus on 'governance and public service delivery'. One can find the Bangladesh Chapter in pages 131-136.

Link of the Outlook. 

Impact of Rupee Depreciation on BD Economy...

Analysts keep making their observations on the impact of recent drastic Rupee depreciation on the Bangladesh economy. The following articles are notable ones:

A lesson for Bangladesh

India sneezes, will we catch the cold?

StanChart analysis on the impact of depreciating Indian Rupee on BD

Rupee Plunge: Opportunities and Challenges for Bangladesh

Comments: Some missing areas which were not discussed in any of the articles are as follows:

1. For making comments on the competing goods of Bangladesh and India in the world market, importers from the rest of the world will look for real effective exchange rate (REER) of both India and Bangladesh  when they will decide whether they will import from Bangladesh or India, if other things remain the same. Recent Rupee depreciation will definitely put India in a better position. However, Bangladesh receives GSP facility in the Eurozone, where Indian exporters rarely can compete. But Bangladeshi exporters will face the reality from Indian exporters for the U.S. and other markets.

2. For making comments about the impact on Bangladesh exports to India, it is important to see the composition of India imports from Bangladesh. Theoretically, exports to India would have been costlier. Over the last few years, Bangladesh has been mainly exporting jute goods and RMG products to India. Latest data reveals that jute exports to India are on a sharp declining trend, while RMG exports to India still hold its position.

3. For making comments about the impact on Bangladesh imports from India, one should look after the composition of Bangladesh imports from India over the last few years. In general, imports will be cheaper. But three issues are important here: (i) whether the good is a necessary one (example, food items); (ii) whether substituting industries in India and other countries use the same input product (example, cotton); and (iii) whether storing is possible for the good (example, fabrics).

In case of (i), import may rise irrespective of the price if storing is possible. If storing is not possible, then import will be as usual. If the similar product is currently imported from other sources, say, China, and if import from China becomes relatively expensive now compared to India, then import from India for the same product will increase. In case of (ii), availability of the input product is only possible after the demand from Indian industries is met, and Bangladeshi importers can compete with importers from other countries. If the input product remains available for Bangladeshi industries, then cost of production will decline. If cost of production declines for Bangladesh export industries, then Bangladeshi products will remain competitive in the world market. In case of (iii), import will rise given the availability.

4. Even if the current pace of imports from Indian remains the same, then it will bring better outcome for inflation scenario through having lowered prices of import commodities.        

Negative import growth after 10 years!

Bangladesh experienced negative import growth of 4.4% in FY2013 after 10 long years!

Reasons:
(i) Large negative import growth of food grains and major consumer products like edible oil and sugar.
(ii) Import bills declined for capital goods, and fertilizer.

Implications:
(i) Current account surplus widens, refers to positive impact of balance of payment surplus.
(ii) Probably, this is the basic reason why foreign exchange reserves have been rising fast, and thus appreciation pressure on Taka.
(iii) As everyone knows, lower capital machinery imports signal transitory and gloomy investment picture, probably related with the upcoming election.

Report on the issue.