Bangladesh Quarterly Economic Update (March 2006) | Asian Development Bank

Bangladesh Quarterly Economic Update (March 2006)

Institutional Document | March 2006

The Bangladesh Quarterly Economic Updates provide recent economic data about the economy in Bangladesh. This issue includes economic data up to March 2006.

Gross domestic product (GDP) growth is estimated at 6.5% in FY2006, higher than 5.6% in the preceding year, reflecting a steady increase in domestic and external demand. Private consumption will be the main driver of growth during this period, bolstered by strong remittance inflows. Growth in FY2006 will also be underpinned by steady expansion in industry and services, aided by a strong recovery in agriculture.

Highlights

  • For FY2006, GDP growth is estimated at 6.5%, higher than the 5.6% recorded in FY2005.
  • The agriculture sector has significantly recovered with a good summer crop and an encouraging expectation for the winter crop.
  • Driven by export-oriented manufacturing, the industrial sector continues to register robust performance.
  • The mobile phone industry is growing rapidly, significantly contributing to economic development and employment generation.
  • Earlier concerns about the adverse effects arising from the phase out of multifiber arrangement (MFA) quotas have not been realized.
  • Despite some success in revenue administration reform, revenue collection continues to lag behind projections.
  • Despite a tight monetary policy stance, money and credit growth continues to be high.
  • Retail fuel prices must be urgently adjusted to avoid serious macroeconomic consequences arising from continuing upward movement in international oil prices.
  • Higher petroleum prices have contributed to rising fuel subsidies which have further burdened the nationalized commercial banks and crowded out much-needed public investment.
  • The combination of higher import costs and rapid monetary expansion is contributing to a slide in the value of the Taka.

Contents 

  • Macroeconomic Developments
    • Agriculture
    • Industry
    • Services
    • Economic Growth
    • Fiscal Management
    • Monetary Developments
    • Balance of Payments
    • Inflation and Exchange Rates
    • Capital Market Update
  • Reforming the Power Sector in Bangladesh
    • Overview
    • Reforms in the Power Sector
    • Results of Reforms
    • Directions for Future Reforms
    • Financial Restructuring of BPDB and DESA
    • Financial Impact of Restructuring
    • Need for Tariff Adjustments
    • Way Forward: ADB's Strategy for Power Sector Development