Bangladesh Quarterly Economic Update (December 2011) | Asian Development Bank

Bangladesh Quarterly Economic Update (December 2011)

Institutional Document | December 2011

The Bangladesh Quarterly Economic Updates provide recent economic data about the economy in Bangladesh. This issue includes economic data up to December 2011.

GDP growth in FY2012 will slow to 6.2% as the growth in exports, a key growth driver, continues to slow. This will also affect production in export-linked domestic industries. The credit-tightening measures by the central bank are expected to depress domestic demand. Although growth in remittances, another key growth driver, has been slowly picking up in response to the taka depreciation, this may not help significantly boost demand, as purchasing power is eroded by high inflation.

Highlights

  • Gross domestic product (GDP) growth is expected to be lower in FY2012 because of slower growth in exports and weak domestic demand.
  • Macroeconomic management came under intense pressure as inflation rose rapidly, subsidies surged and foreign exchange reserves depleted.
  • Inflation has been rising, with nonfood inflation rising faster
  • Large expansion in subsidy spending put pressure on budget and caused large growth in government’s bank borrowing.
  • Reserves and exchange rate came under pressure as import payments outpaced export and remittance receipts, and foreign financing declined.
  • Closer coordination among monetary, fiscal, and exchange rate policies is needed to enhance macroeconomic stability.
  • Quality of infrastructure in Bangladesh is low.
  • Bangladesh needs to raise investment to over 30% of GDP to attain.

Contents 

  • Macroeconomic Developments
    • Highlights
    • Sector Performance and Economic Growth
    • Inflation
    • Fiscal Management
    • Monetary and Financial Developments
    • Balance of Payments
    • Exchange Rate
    • Capital Market
  • Special Topic: Bangladesh Environment Challenges and ADB Strategy
    • Environmental Challenges and the Poverty Nexus
    • Climate Change and Global Environmental Risks
    • ADB Strategy