2017年-世界发展银行全球_Bangladesh_Development_Update_September_2017___Towards_More_Better_and_Inclusive_Jobs_44页_1mb

Bangladesh Development Update Summary

Core Content

This Bangladesh Development Update from September 2017 focuses on economic growth, poverty reduction, and job creation in the context of macroeconomic stability, structural reforms, and external risks. The report highlights the challenges the economy faces in maintaining growth and inclusive development, especially in light of recent natural disasters, political uncertainties, and a slowdown in key growth drivers.

Main Points

Economic Growth

• GDP Growth: In FY17, GDP growth was officially estimated at 7.24%, with manufacturing and services being the main contributors on the supply side.
• Growth Drivers:
  • Private consumption and public investment were key demand-side contributors.
  • Statistical discrepancy remains a concern, as official growth estimates do not align with high-frequency indicators.
• Slowdown: Growth is projected to slow to 6.4% in FY18 due to adverse factors like floods, reduced remittances, and flat exports.

Poverty Trends

• Poverty Reduction: The share of the population living under the official upper poverty line fell from 31.5% in 2010 to 24.3% in 2016/17.
• Slower Pace: The annual rate of poverty reduction slowed after 2010, with a 7 percentage point decline since 2010.
• Poverty Depth: The depth of poverty has remained constant over the years, indicating that the reduction is not necessarily deeper but more widespread.
• Impact of Factors: Declining remittances, flat garment exports, and rising food prices may have contributed to the slowdown in poverty reduction.

Macroeconomic Stability

• Inflation: Non-food inflation slowed to 4.6% in FY17, and headline inflation decelerated to 5.4%, aided by prudent monetary management and weak aggregate demand.
• Foreign Exchange Reserves: Despite a $1.5 billion current account deficit, foreign exchange reserves increased due to a robust financial account surplus.
• Exchange Rate: The nominal and real effective exchange rate depreciated, a correction that was long overdue.
• Fiscal Deficit: The fiscal deficit increased to nearly 5% of GDP, with more than half of the deficit financed from expensive domestic sources.
• Banking Sector: The banking system remains stressed with high non-performing loans (NPLs) and tightened credit constraints.

Structural Reforms

• Stagnation: Structural reforms have slipped or stalled, particularly in taxation and the financial sector.
• Election Impact: With elections planned for early 2019, the government is likely to avoid sensitive reforms in the next two fiscal years.

Key Challenges

Job Creation

• Job Growth: Between 2003 and 2016, the economy generated an average of 1.15 million net jobs per year.
• Slowdown in Job Creation: The pace of job creation has fallen sharply in recent years.
• Need for Quality Jobs: The economy needs to diversify manufacturing, expand high-productivity services, and improve labor market linkages to create more and better jobs.

Policy Agenda

• Investment Climate: Policies must improve the investment climate, diversify the manufacturing sector, and expand high-productivity services.
• Labor Market Reforms: Education and skills development, job linkage services, and entrepreneurship promotion are essential.
• Worker Protection: Social insurance and worker protection need to be expanded.
• Sectoral and Regional Policies: These should strengthen firm capabilities, extend domestic supply chains, and encourage innovation.
• Urban-Rural Connectivity: Supporting secondary cities and urban-rural connectivity is crucial for inclusive growth.

Risks and Outlook

Downside Risks

• Political Instability: The resurgence of political unrest in the run-up to elections poses a risk.
• Export Market Slowdown: A protracted slowdown in key export markets like the EU and US could impact growth.
• Remittances Decline: A further easing of remittances could slow down domestic demand.
• Credit Constraints: Hardening of credit constraints due to rising NPLs and bank insolvency.
• Corporate Governance: Weakening corporate governance in the banking system.
• Natural Disasters: Floods and other natural shocks may have countered poverty reduction efforts.

Upward Risks

• Export and Remittance Surprises: Export demand and remittances could surpass expectations, providing a boost to growth.

Policy Recommendations

• Accelerate Reforms: Institutional and market reforms are needed to attract investment and stimulate innovation.
• Improve Productivity: Investment in productivity-enhancing sectors is crucial.
• Strengthen Infrastructure: The investment in infrastructure should continue, but quality is a concern.
• Enhance Education and Skills: Education and skills must be relevant and of high quality to meet labor market needs.
• Strengthen Social Protection: Social insurance and worker protection should be expanded.
• Support Secondary Cities: Regional policies should focus on developing secondary cities and facilitating urban-rural connectivity.

Conclusion

Despite some headwinds, the Bangladesh economy has maintained healthy growth. However, the pace of poverty reduction and job creation has slowed, and structural reforms have stalled. The floods and political instability have created significant risks to economic stability and growth. A comprehensive and well-coordinated policy agenda is essential to accelerate job creation, improve the investment climate, and ensure sustainable growth.