Bangladesh Quarterly Economic Update (June 2013)
The Bangladesh Quarterly Economic Updates provide analysis and data about the economy in Bangladesh. This issue's special topic is the proposed FY2014 budget.
To accelerate poverty reduction and create jobs for the large and growing labor force, Bangladesh needs to raise economic growth, e.g., by about 8% annually over the medium term. It attained average growth of just over 6% in the past decade, with some contribution from capital accumulation, modest rise in labor productivity, and total factor productivity. While total factor productivity growth requires a longer time span to materialize, Bangladesh’s short- and medium-term growth prospects mainly hinge on accelerating capital deepening, supported by higher private and public investment and foreign direct investment (FDI). Increased private investment is required to expand the capacity of existing firms, diversify the economy, and unleash new growth drivers. At the same time, large investment in power, energy, transport, and skills development is needed for crowding in private investment and FDI. In addition, good governance and political stability are also essential for enhancing Bangladesh’s growth prospects.
- Gross domestic product growth slowed to 6.0% in FY2013.
- Agriculture growth dropped to 2.2% due to slower crop and horticulture growth.
- Industry grew strongly led by healthy manufacturing growth.
- Services growth decreased slightly due to lower agriculture growth and slower private credit and import growth.
- Inflation fell to 7.7% in FY2013 with lower food and nonfood prices.
- The FY2013 fiscal deficit remained within budget.
- The FY2014 budget proposes a moderately expansionary fiscal policy stance.
- Slowing growth in private credit undermines the central bank’s accommodative policy stancev
- Higher remittance and export growth and a decline in imports raised the current account surplus.
- Bangladesh needs to improve the business climate to stimulate domestic and foreign investment.
- Macroeconomic Developments
- Sector Performance and Economic Growth
- Fiscal Management
- Monetary and Financial Developments
- Balance of Payments
- Exchange Rate
- Capital Market
- Special Topic: FY2014 Budget
- Macroeconomic Framework
- Revenue Measures
- Public Spending
- Priority Development Sectors