Bangladesh Quarterly Economic Update (September 2005) | Asian Development Bank

Bangladesh Quarterly Economic Update (September 2005)

Institutional Document | September 2005

The Bangladesh Quarterly Economic Updates provide recent economic data about the economy in Bangladesh. This issue includes economic data up to September 2005.

Gross domestic product (GDP) growth is expected to level off at 6% in FY2006, higher than 5.4% during the previous year. While aggregate growth in FY2006 will be aided by recovery in agriculture, growth in industry and services is expected to moderate from its strong performance in FY2005. This slowing in part reflects a more moderate gain expected in overall export growth as the garment and textile industry comes under more intense competitive pressure. More generally, the outlook for growth points to the need to tighten monetary policy, both to keep a lid on pressures on the exchange rate as the current account deteriorates and also to contain inflationary pressures. Tightened interest and credit policies in turn may slow consumer and investment spending.

Highlights

  • For FY2006, GDP growth is forecast at 6%, higher than 5.4% recorded in FY2005.
  • Agriculture output rebounds in the summer of 2005 after the flood-induced damages of last year.
  • Foreign investors demonstrate a growing interest in Bangladesh.
  • The National Economic Council approves the full-fledged Poverty Reduction Strategy Paper.
  • Although fiscal management is prudent, revenue collection continues to lag projections.
  • The balance of payments remains under pressure due to higher oil prices, but the adverse effects have been partly moderated by rapid growth in worker’s remittances.
  • Monetary policy continues to accommodate buoyant growth in domestic demand.
  • Inflation is on an uptrend due to higher domestic food prices and higher petrol import prices.

Contents 

  • Macroeconomic Developments
    • Agriculture
    • Industry and Services
    • Economic Growth
    • National Poverty Reduction Strategy
    • Fiscal Management
    • Monetary Developments
    • Balance of Payments
    • Inflation and Exchange Rates
    • Political Developments
  • Debt Sustainability and Economic Development in Bangladesh
    • Public Sector Borrowing Trends
    • Future Borrowing Requirements
    • Modeling Debt Sustainability
    • Calculating the NPV of the Oustanding Public Debt Stock
    • Model Assumptions
    • Simulation Results
    • Key Conclusions
  • Bangladesh Rice Price Policy
    • Introduction
    • The Soaring Rice Prices of 2003–2005
    • Concluding Remarks