Bangladesh Quarterly Economic Update (March 2013)

Institutional Document | March 2013

The Bangladesh Quarterly Economic Updates provide recent economic data about the economy in Bangladesh. This issue forecasts GDP to be lower in FY2013 than in FY2012.

Gross domestic product (GDP) growth in FY2013 is expected to be lower than the previous year’s 6.3%, because of continued weak external and domestic demand. Export growth is unlikely to pick up because of fragile consumer confidence in eurozone countries and modest recovery in the United States. Domestic demand is subdued because of low consumer and investor confidence, slower growth in agricultural income because of lower rice price, and slowdown in real estate and construction activities. Declines in capital machinery and industrial raw material imports also indicate sluggish economic activity in the coming months. In addition, supply side constraints, mainly electricity and gas shortages, will hold down short-term growth prospects. Economic growth will also be affected by continued political unrest.

Highlights

  • Gross domestic product (GDP) growth is expected to be lower than that in FY2012.
  • Stagnating private investment is a key concern.
  • Agriculture growth is expected to be higher.
  • Electricity and gas shortages, and weak external and domestic demand, will impede industry growth.
  • Services sector growth will moderate due to subdued industry and trade activities.
  • Inflation is falling because of lower food and nonfood prices.
  • Revenue collection is likely to fall below target.
  • Bangladesh Bank announced an accommodative policy stance in its latest monetary policy statement.
  • Higher remittance growth and decline in imports raise the surplus in the current account.
  • Continued political unrest will affect investment and growth.

Contents 

  • Sector Performance and Economic Growth
  • Inflation
  • Fiscal Management
  • Monetary and Financial Developments
  • Balance of Payments
  • Exchange Rate
  • Capital Market