2017年-世界发展银行全球_Bangladesh_Development_Update_2017_88页_2mb

Bangladesh Development Update Summary

Core Content

This document provides an analysis of Bangladesh's recent economic developments, long-term growth prospects, constraints on female labor force participation, economic outlook and risks, and policy challenges. It is prepared by the World Bank to inform the Government of Bangladesh, researchers, and stakeholders about the current state of the economy and its future trajectory.

Main Points

I. Recent Economic Developments

• Poverty Trends: Poverty reduction has continued, with the headcount poverty rate falling to 23.2% in 2016 (April-June) from 31.5% in 2010. Factors contributing to this include rebound in labor-intensive exports, decline in food inflation, and wage increases.
• Growth: GDP growth in FY16 was reported at 7.1%, driven by industry and net exports. Manufacturing and construction led industrial growth to 11.1%. However, recent slowdown in exports and remittances, along with rising food inflation, may decelerate poverty reduction.
• Inflation: Headline inflation dropped to 5.3% in February 2017, mainly due to soft international commodity prices and macroeconomic management. Core inflation and expectations remain high.
• External Sector: Foreign exchange reserves reached $33 billion in early April 2017, but a current account deficit of $1.1 billion emerged due to weak export growth and declining remittances. The real effective exchange rate (REER) appreciated, and the financial sector remains fragile.
• Fiscal Policy: Fiscal deficit has declined due to improved revenue mobilization and reduced subsidies. However, reliance on National Savings Certificates (NSCs) increased the interest burden. Ad-hoc price adjustments of gas and electricity reduced the quasi-fiscal deficit.
• Monetary Policy: Monetary policy has been accommodative, but has not effectively protected competitiveness. Interest rates have declined, but the real effective exchange rate has appreciated.
• Structural Reforms: Reforms have not kept pace with the need to improve productivity and investment efficiency. The financial sector remains underdeveloped, with high non-performing loans (NPLs) and weak governance.

II. Long-Term Growth Prospects

• Potential Growth: Bangladesh needs to increase its potential growth rate to accelerate its progress on the middle-income path. An investment-led strategy with improved public capital efficiency could support growth above 5% for the next decade.
• TFP Growth: Total Factor Productivity (TFP) growth is crucial for long-term growth. It is influenced by resource allocation and firm-level productivity.
• Growth Dividends: To achieve growth above 7% annually, Bangladesh must close the inter-sectoral productivity gap and significantly increase female labor force participation (FLFP).
• Productivity Gains: A 1% annual increase in productivity, combined with increased FLFP, could allow Bangladesh to achieve an average growth rate of over 7% during the 7th Plan period.

III. Constraints on Female Labor Force Participation

• Household Responsibilities: Women bear a disproportionate share of household duties, limiting their ability to participate in the labor force.
• Human Capital Deficiency: Women often lack the education and skills required for higher-paying jobs, leading to a mismatch in the labor market.
• Human Capital Mismatch: The skills women possess are not aligned with the needs of the job market, resulting in underutilization of their potential.
• Gender Discrimination: Discrimination in hiring and promotion persists, even in formal sectors. Employers cite various challenges in employing women, including cultural norms and logistical difficulties.
• Policy Recommendations: Improving access to education and vocational training, enhancing legal rights, and fostering a non-discriminatory workplace environment are key to increasing FLFP.

IV. Outlook and Risks

• Growth Outlook: Medium-term growth is expected to remain robust, supported by a prudent macro-fiscal balance, modest infrastructure improvements, and reduced business costs.
• Export Markets: Growth in the US and Europe is projected to improve, which could benefit Bangladesh's exports. Global trade is also expected to expand.
• Downside Risks: Domestic risks include financial sector instability, fiscal reform slippage, and political tensions. External risks include policy uncertainty in the US and Euro Area, and potential increases in energy prices.
• Upward Risks: A rise in energy prices could increase remittances from GCC countries, presenting an upside risk to the growth outlook.

V. Policy Challenges

• Structural Barriers: Removing structural barriers to female labor force participation is critical for sustained growth.
• Productivity Growth: Reforms are needed to improve productivity, including enhancing the quality of capital, improving financial sector efficiency, and boosting infrastructure.
• Investment and Innovation: Increasing investment and innovation will be necessary to improve productivity and growth.
• Trade and Integration: Greater internal and external integration through trade reforms is important for capital inflows and growth.
• Gender Equality: Promoting gender equality in labor markets requires collaborative efforts among the government, private sector, and civil society. Key initiatives include reducing early marriage, improving education for girls, and ensuring gender equity in labor legislations.
• Policy Implementation: The government must implement the new VAT and Supplementary Duty Act to improve domestic resource mobilization and signal commitment to further reforms.

Key Information

• Female Labor Force Participation (FLFP): Increasing FLFP is essential for achieving higher growth rates. If FLFP reaches 45% by 2020, Bangladesh could maintain growth 1 percentage point above trend.
• Potential GDP Growth: If productivity growth and FLFP increase by 1% annually, Bangladesh could achieve an average growth rate of over 7% during the 7th Plan period.
• Remittances: Declining remittances are a near-term concern, though they remain a significant source of foreign exchange and growth.
• Infrastructure and Energy: Poor infrastructure, inadequate energy supply, and high costs of doing business are major obstacles to growth.
• Fiscal and Monetary Policies: Fiscal prudence has been maintained, but the composition of deficit financing and the quality of budget implementation remain areas of concern. Monetary policy has not fully supported competitiveness.

Conclusion

Bangladesh has made progress in poverty reduction and economic growth, but to sustain and accelerate this progress, it must address structural and gender-related challenges. The country needs to implement reforms to improve productivity, enhance female participation in the formal sector, and strengthen its financial and institutional frameworks. With these efforts, Bangladesh can realize its economic potential and maintain robust growth in the coming years.