2018年-世界发展银行全球_Bangladesh_Development_Update_April_2018___Building_on_Resilience_47页_1mb

Bangladesh Development Update Summary (April 2018)

Core Content

This Bangladesh Development Update (April 2018) provides an overview of the country's economic performance, challenges, and outlook in FY17 and FY18. It emphasizes the need for structural reforms to sustain and accelerate development progress, particularly in the context of poverty reduction and macroeconomic stability.

Main Views and Key Information

Economic Resilience and Growth

• Growth Resilience: Bangladesh has maintained healthy output growth despite challenges, with GDP growth in FY18 reaching 7.3%, slightly above the 7th Plan target.
• Sectoral Contributions:
  • Industry and Services were the main growth drivers, contributing 3.10% and 3.41% respectively.
  • Agriculture growth slowed to 0.44% in FY17 due to natural disasters and production dislocations.
  • Exports and Remittances rebounded significantly, with export growth reaching 8.7% in RMG and remittance growth of 16.5% in the first eight months of FY18.
• Private Investment: Real private investment growth slowed to 8.1% in FY17, down from 10.3% in FY16, due to cumbersome regulations and inadequate infrastructure.
• Public Investment: Public investment grew by 17.3% in FY17, contributing to a rise in its share of GDP to 7.4%.

Inflation and Monetary Policy

• Inflation Acceleration: Inflation rose to 5.8% in the first half of FY18, driven by supply shocks (e.g., rice price increases) and delayed policy responses.
• Monetary Policy: The Bangladesh Bank (BB) maintained an accommodative stance, but prudential controls tightened, leading to lending rates returning to double digits.
• Exchange Rate: The taka depreciated by 6.5% between January 2017 and March 2018, with foreign exchange reserves falling due to interventions to stabilize the exchange rate.

Balance of Payments and Fiscal Outlook

• Current Account Deficit: Widened sharply, driven by surging imports, and reached 5.09% of GDP in FY17.
• Balance of Payments Deficit: The overall balance of payments swung into deficit for the first time since FY11.
• Fiscal Deficit: Contained due to weaker revenue growth being offset by even weaker expenditure growth.
• Fiscal Outlook: The fiscal deficit is expected to exceed the 5% of GDP target due to Rohingya refugee crisis, rising subsidies, and fiscal slippage.

Poverty and Inequality

• Poverty Reduction: Continued but slowed, with each percent of growth contributing a third less to poverty reduction.
• Extreme Poverty: Projected to fall modestly to 11–12% in the medium-term.
• Inequality: Increased due to rising rural inequality, while urban inequality declined.
• Agriculture's Role: Remains the main income source for the poorest households, but growth has become less equal and less poverty-reducing.

Risks and Challenges

• Macroeconomic Vulnerability: Increased due to inflation, global commodity price rises, and fiscal pressures.
• Financial Sector: Vulnerability is rising due to non-performing loans (NPLs) and tightening liquidity.
• Political Risks: The approaching elections could elevate instability and policy uncertainty.
• Investment Enabling Reforms: Needed to improve business environment, regulatory framework, infrastructure, and skills development.
• Structural Reforms: Required to enhance competitiveness, attract investment, and reduce inequality.

Policy Recommendations

• Implement Investment Enabling Reforms: Such as the One-Stop-Shop Act.
• Strengthen Macroprudential Frameworks: To improve resource allocation and resilience.
• Enhance Exchange Rate Flexibility: To reduce vulnerabilities and improve macroeconomic stability.
• Ensure Revenue Buoyancy: Through efficiency gains in tax administration, carbon taxes, streamlined tobacco taxes, and rationalizing tax incentives.
• Prioritize Expenditures: To find additional savings, especially in the context of subsidies and Rohingya refugee response.
• Maintain Caution on Monetary Policy: Given the rising inflation and fiscal slippage.

Near and Medium-Term Outlook

• GDP Growth: Projected to remain in the 6.5–7% range during FY18–20.
• Global Recovery: Expected to continue, but with downside risks such as tightening financing conditions, rising inflation, increased protectionism, and geopolitical tensions.
• Exchange Rate: Likely to remain under pressure due to current account deficits and import surges, but foreign exchange reserves will allow moderation of currency weakening in the short-term.
• Remittances: Expected to recover further, aided by GCC economies' higher oil prices and formal remittance incentives.

Conclusion

Bangladesh has demonstrated economic resilience and growth momentum, but structural reforms are critical to sustain and accelerate progress. The poverty reduction rate has slowed, and inequality has risen, particularly in rural areas. Political and macroeconomic risks are on the rise, and fiscal and monetary policies must be carefully managed to avoid debt distress and currency depreciation. Investment in infrastructure, improvement in the business environment, and enhancing competitiveness are essential for long-term development and global market integration.