Bangladesh Economic Review

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Date Submitted: 01/19/2013 09:12 PM

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Bangladesh Economic Review:

Macro Aspect:

(i)Macroeconomic Situation:

In line with global economic trends, Bangladesh has experienced two volatile years (FY2008‐09 and FY2009‐10) when its economic growth was restrained below 6.0 per cent level. The fist one, FY2008‐09, was the year of global financial and economic crisis. In the face of fall in global demand commodity prices as well as domestic inflationary trend declined considerably.Export revenues and remittance income growth started to decelerate, while the domestic inflationary trend took an upturn in accordance with the international market. A visible improvement in public investment (in terms of ADP implementation as per cent of GDP) has also been a promising feature of recent fiscal year. However, over these two years Bangladesh remained an underinvested country. The investable surplus (reflected by the gap between national savings and total investment) could not be made use of due to the lack of domestic infrastructure. Growth in manufacturing sector (and hence in industry sector) remained modest. On the other hand, strong growth in agriculture sector helped maintain the GDP growth at respectable level and expansion of safety net programmes provided some protection to the living standard of the marginalised groups. In the backdrop of the low export growth of FY2009‐10 (‐7.0 per cent), the robust performance during the first five months of FY2010‐11 is indeed encouraging. Export registered a 35.8 per cent growth in this period. This growth in export was shared by both RMG and non‐RMG sectors such as, raw jute, frozen food and leather products. Because of various developments experienced in the global, regional and national arena, macroeconomic management is set to become more challenging. In FY2010‐11 the economy was provisionally estimated to have grown at a rate of 6.66 percent, slightly higher than the growth rate (5.83 percent) of FY2009-10.As the flow of remittance decreased, investment in...