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

Bangladesh Quarterly Economic Update (September 2006)

Institutional Document | September 2006

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

Gross domestic product (GDP) growth has been steadily increasing in recent years, reaching 6.7% in FY2006. Growth has been accompanied by sustained poverty reduction. Poverty declined by about 1.8 percentage points a year between 2000 and 2005 compared with a decline of about only 1 percentage point a year in the preceding decade.

GDP growth is forecast at 6.0% in FY2007. The growth rate is expected to moderate, as more normal agriculture growth follows the post-flood high-growth recovery of FY2006. The conditions for expansion in industry (aided by new capacity in garments and textiles, chemicals, and engineering) and services are expected to be favorable, although emerging infrastructure constraints pose problems. The main challenges facing the thriving garments subsector are emerging social compliance issues including labor unrest and infrastructure constraints rather than the adverse effect of abolishing multifiber agreement quotas.

Highlights

  • Growth of gross domestic product (GDP) in FY2007 is projected at 6%.
  • The industry sector, lifted by strong external demand, continues to show strong performance.
  • Poverty declined by 1.8 percentage points a year between 2000 and 2005.
  • Bangladesh faces several downside risks, including political uncertainty and infrastructure constraints.
  • Although fiscal management remains prudent, revenue collection has fallen short of projection.
  • Despite the tight monetary policy, high money and credit growth continues.
  • Overall balance of payments shows a surplus because of robust growth in exports and workers’ remittances, and subdued import growth.
  • Although declining, inflation remains high because of expansion of domestic credit and higher international prices.

Contents 

  • Macroeconomic Developments
    • Agriculture
    • Industry and Services
    • Economic Growth
    • Fiscal Management
    • Monetary Developments
    • Balance of Payments
    • Inflation and Exchange Rates
    • Capital Market Update
  • The 2005 Household Income and Expenditure Survey
    • Sample Design
    • CBN Poverty Lines for HIES-2005
    • Updating HIES-2000 Poverty Lines
    • Main Findings from HIES-2005
    • Depth and Severity of Poverty
    • Conclusions
  • Potential of High-Value Crops
    • Opportunities and Challenges in Agriculture Development
    • Crop Diversification: Economic and Agronomic Factors
    • Land Allocation Patterns and Farm Size
    • High-Value Crops
    • Crop Diversification Potential
    • Crop Diversification in the Northwest Region
    • Crop Diversification in the Chittagong Hill Tracts Region
    • Import Substitution via Increased HVC Production
    • Export Potential of HVCs
    • Key Challenges
    • Conclusions