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Bangladesh Economic Update, October 2012
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- World Bank.
- Series:
- Economic Updates and Modeling
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Access to Information.
- Accounting.
- Agriculture.
- Bank Supervision.
- Banking Sector.
- Collateral.
- Commercial Banks.
- Commodity Prices.
- Currencies and Exchange Rates.
- Debt Markets.
- Depreciation.
- Emerging Markets.
- Expenditures.
- Finance and Financial Sector Development.
- Financial Crisis.
- Financial Institutions.
- Fiscal Policy.
- Food & Beverage Industry.
- Food Consumption.
- Food Security.
- Foreign Direct Investment.
- Fraud.
- Global Economy.
- Household Income.
- Income Tax.
- Industry.
- Inflation.
- Interest Rates.
- Labor Market.
- Macroeconomics and Economic Growth.
- Market Forces.
- Monetary Policy.
- Natural Disasters.
- Petroleum Products.
- Political Instability.
- Price Volatility.
- Private Investment.
- Private Sector Development.
- Public Investment.
- Remittances.
- Securities.
- Slowdown.
- Supply Side.
- Transparency.
- Wheat.
- World Food Programme.
- Local Subjects:
- Access to Information.
- Accounting.
- Agriculture.
- Bank Supervision.
- Banking Sector.
- Collateral.
- Commercial Banks.
- Commodity Prices.
- Currencies and Exchange Rates.
- Debt Markets.
- Depreciation.
- Emerging Markets.
- Expenditures.
- Finance and Financial Sector Development.
- Financial Crisis.
- Financial Institutions.
- Fiscal Policy.
- Food & Beverage Industry.
- Food Consumption.
- Food Security.
- Foreign Direct Investment.
- Fraud.
- Global Economy.
- Household Income.
- Income Tax.
- Industry.
- Inflation.
- Interest Rates.
- Labor Market.
- Macroeconomics and Economic Growth.
- Market Forces.
- Monetary Policy.
- Natural Disasters.
- Petroleum Products.
- Political Instability.
- Price Volatility.
- Private Investment.
- Private Sector Development.
- Public Investment.
- Remittances.
- Securities.
- Slowdown.
- Supply Side.
- Transparency.
- Wheat.
- World Food Programme.
- Place of Publication:
- Washington, D.C. : The World Bank, 2012.
- System Details:
- data file
- Summary:
- Despite an unfavourable global economy, economic growth in Bangladesh is projected at close to 6 percent in fiscal 2013 (FY13). Adverse external demand and domestic supply constraints continue to be a drag on growth. Shortfalls in exports and investments due to a possible protracted crisis in the euro area and internal supply constraints may underpin the moderation of growth. Investment targets of the medium term budget framework 2013 to 2017 face major obstacles in shortage of electricity and gas supplies, and poorly functioning roads and portraits One positive prospect on the investment front is the increase in foreign direct investment in FY12, which surpassed the USD 1 billion for the second time in Bangladesh's history. Fiscal policy is back on track. Fiscal performance in FY12 was favourable, notwithstanding increasing subsidies. The overall budget deficit in FY12 is estimated at 4.5 percent of Gross Domestic Product (GDP). Domestic financing of the deficit declined to 3.2 percent of GDP, from 3.5 percent in FY11. Lower government borrowing from the banking system in the second half of FY12 was a welcome reversal from worrying trends in the first half of the year. The FY13 budget deficit target 5 percent of GDP is modest, though higher than the estimated 4.5 percent of FY12, and is likely to be undershot primarily because of a shortfall in the implementation of the ambitious Tk 550 billion annual development programs, by now a familiar pattern. However, the financing of the deficit may be a challenge with a projected USD 2.2 billion net external financing need, substantially more than the USD 1.4 billion of the revised FY12 budget. The rest of the deficit is projected to be financed from domestic sources, with a still heavy 69 percent reliance on bank borrowing. Bangladesh's economic outlook is subject to several near-term risks. Possible intensification of the euro area crisis may deepen Bangladesh's export slump of the last six months; escalation of global food prices may reverse the recent decline in food inflation; global oil price shock will place the balance of payments under pressure again and shrink fiscal space; banks are susceptible to credit and market risk and the global economic vulnerabilities; and increased political instability and labour unrest may depress investments further.
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