2013年-世界发展银行全球_Bangladesh_Development_Update_October_2013_44页_1mb

Bangladesh Development Update Summary (October 2013)

Core Content

Economic Performance

• GDP Growth: FY13 GDP growth decelerated to 6 percent, the second consecutive year of decline, driven by political instability, energy and infrastructure deficits, and disruptions in services. Despite this, the growth remained above the average for developing countries.
• Private Investment: Declined by 1.2 percent, with a sharp drop in private sector credit growth (from 19.7% to 11.04%) and capital machinery imports. Political uncertainty and the garment sector crisis were key factors.
• Public Investment: Increased significantly, contributing to a rise in total investment. Public investment reached 7.9% of GDP, the highest in Bangladesh's history.
• Exports: Grew by 11.2% in FY13, with RMG exports increasing by 12.7%, supported by favorable rules of origin and despite global economic headwinds.
• Remittances: Inbound remittances rose by 12.6% to $14.45 billion, driven by a surge in workers going abroad.
• Inflation: Annual average inflation fell to 6.8% in FY13 from 8.7% in FY12, but remained high at 7.4% in August 2013. The decline was due to falling food and non-food prices, but the inflation rate was still above the average for developing countries.
• External Balances: Improved significantly, with the trade deficit shrinking and the current account moving to a surplus of over $2.5 billion. Financial account surplus also increased, reaching $2.8 billion in FY13.
• Foreign Exchange Reserves: Reached historic highs, equivalent to nearly five months of imports, 11.8% of GDP, and 20.1% of broad money.

Banking and Financial System

• The banking system remains under stress due to financial scams and loan defaults in state-owned commercial banks (SCBs), leading to insolvency risks.
• Capital market activities were weak throughout FY13, with low investor confidence and fluctuating securities trading.

Fiscal Policy

• Fiscal policy was on track, with an overall fiscal deficit (excluding grants) at 4.3% of GDP, below the budget target of 5%.
• The FY14 budget targets a modest deficit of 4.6% of GDP and a domestic financing target of 2.9%.
• Domestic challenges include rising road traffic congestion, energy and infrastructure deficits, and increased welfare spending needs.

Main Challenges

• Maintaining Reforms: Structural reforms have progressed slowly, with some being regressive. The government needs to continue improving governance and regulatory frameworks.
• Rebuilding Garment Sector Image: The collapse of Rana Plaza and the Tazreen fire highlighted severe safety and labor compliance issues in the garment industry, which is a major export sector.
• Removing Supply Bottlenecks: Persistent energy and infrastructure deficits, along with frequent strikes and political instability, continue to hinder the investment climate.
• Addressing Internal Risks: Political uncertainty and internal strife are now the primary risks, with the potential to disrupt economic stability and growth.

Key Issues and Concerns

• Worker Safety and Labor Standards: The garment industry faces a critical juncture due to the lack of compliance with safety and labor standards. This has led to increased scrutiny from the international community.
• Global Market Risks: The potential suspension of favored access to the EU market could significantly impact exports, with an estimated 4.1–8% decline.
• Investment Climate: Bangladesh's investment climate remains poor, with issues such as inadequate infrastructure, corruption, access to finance, and inefficient bureaucracy hindering business activities.
• Contract Enforcement: Bangladesh is ranked among the worst in contract enforcement, with an average of over 1400 days, which is a major obstacle to foreign investment.
• Exchange Rate Volatility: The divergence between formal and informal exchange rates, with a rising premium on the informal market, indicates underlying economic pressures.

Outlook and Recommendations

• Volatility and Risks: The economy is moving into a more volatile phase, with risks from internal instability and structural weaknesses.
• Need for Immediate Action: The government must ensure the implementation of reforms suggested by foreign buyers and international agencies. Coordination among stakeholders is essential to avoid redundant efforts and ensure effective reforms.
• Importance of Structural Reforms: Addressing the root causes of the garment industry's issues, including safety standards and labor rights, is critical to maintaining its competitive edge and export potential.

World Bank Assistance

• The World Bank has been involved in supporting Bangladesh through various reforms and development initiatives.
• Assistance includes promoting structural reforms, improving the investment climate, and aiding the garment sector in rebuilding its image and addressing supply bottlenecks.

Key Data Highlights

• GDP Growth: 6.03% in FY13, down from previous years.
• Private Investment: Declined to -0.3% of GDP, the lowest in history.
• Public Investment: Increased to 2.0% of GDP, the highest in history.
• RMG Exports: Grew by 12.7% in FY13, with a notable increase in market share in the EU.
• Remittances: Rose to $14.45 billion in FY13, up from $12.84 billion in FY12.
• Inflation: Declined to 6.8% in FY13, but still high at 7.4% in August.
• Foreign Exchange Reserves: Reached $15.3 billion by end-June 2013, equivalent to nearly five months of imports.

Conclusion

Bangladesh's economy has shown resilience to global and political shocks, but faces significant internal challenges. The garment sector, a key driver of growth and employment, is at a critical juncture requiring urgent reforms in safety, labor standards, and governance. Structural and institutional improvements, along with coordinated efforts among all stakeholders, are essential to ensure long-term stability and growth.