2011年-世界发展银行全球_Bangladesh_Economic_Update_September_2011_13页_1mb

Bangladesh Economic Update Summary

Core Content

This document provides an economic update for Bangladesh in September 2011, analyzing the country's economic performance and challenges in the context of both domestic and global economic conditions.

Main Points

Economic Performance

• GDP Growth: Real GDP growth in FY11 reached 6.7%, surpassing the government's target and continuing an upward trend after a decline during FY06-09.
• Sector Contributions: Growth was driven by strong performance in manufacturing and construction, bumper harvests in agriculture, and sustained contributions from the services sector.
• Export Growth: The garment sector led the recovery in exports, with a real growth of 30.3% in FY11. Other sectors such as jute, leather, and frozen food also showed growth.
• Import Growth: Imports surged by 41.8% in FY11, driven by increased demand for intermediate goods, capital machinery, and petroleum products.
• Remittances: Remittance growth slowed to 6% in FY11, contributing to a decline in GNI growth from 6.3% to 5.7%.

Inflation Concerns

• High and Volatile Inflation: Inflation reached 11.3% in August 2011, the highest in three and a half years. Food inflation peaked at 14.4% in April and declined to 12.7% in August, while non-food inflation rose to 8.8%.
• Inflationary Drivers: Both global commodity price increases and loose monetary policy contributed to inflation. Public consumption growth above 8% exacerbated demand-side pressures.
• Monetary Policy Response: The Bangladesh Bank (BB) raised interest rates by 50 basis points to contain inflation, aiming to reduce domestic credit growth from 26% in FY11 to 18% in FY12.

External Imbalances

• Current Account Surplus Narrowed: The current account surplus declined from 3.7% of GDP in FY10 to 0.9% in FY11 due to rapid import growth and slow remittance growth.
• Foreign Exchange Reserves: The import cover dropped from 5.1 months in FY10 to 3.7 months in FY11, with the taka depreciating by 6.6% against the US dollar.
• Balance of Payments Deficit: A deficit of US$635 million in FY11 contributed to reserve losses and exchange rate instability.

Fiscal Deficit and Deficit Financing

• Fiscal Deficit: The overall fiscal deficit for FY11 was 4.2% of GDP, slightly below the planned 5%, but higher than the previous year's 3.7%.
• Revenue Performance: Strong tax collections helped contain the deficit, with total tax revenues rising to 10.1% of GDP.
• Deficit Financing: Domestic financing of the deficit increased to 3.3% of GDP in FY11, with a significant portion coming from the banking system. The FY12 budget is expansionary, with a projected fiscal deficit of 5% of GDP, of which 3% will be financed domestically and 2% externally.

Key Information

Risks to Growth

• Global Economic Risks: A global slowdown, driven by the US debt downgrade and Euro Zone issues, poses a threat to Bangladesh's balance of payments, exchange rate, and investment.
• Domestic Policy Risks: Slow reforms in the investment climate, inadequate energy supply, and poor infrastructure quality could hinder growth. Financial sector weaknesses, including non-performing loans and weak corporate governance, also threaten economic stability.

Structural Reforms

• Mixed Progress: There were positive developments in telecommunications and tax reforms, but negative signals included increased tariff protection and the potential for overbanking.
• Telecom Reforms: The renewal of 2G licenses saw improvements in pricing and payment options, but the asymmetric Market Competition Factor could distort the market.
• Tax Reforms: The 2011 Finance Act introduced ADR mechanisms, improved withholding tax compliance, and reduced the tax burden on small businesses.
• Banking Reforms: BB plans to allow new banks and insurance companies, but this may not necessarily increase competition or access to finance and could require stricter regulation.

Financial Sector Issues

• Non-Performing Loans: The volume of non-performing loans has increased due to deflation in asset prices, liquidity pressures, and weak underwriting practices.
• Capital Market Exposure: Banks have significant exposure to the stock market, which could increase fiscal risks and moral hazard.
• Liquidity Pressures: Increased demand for trade financing and higher interest rates have intensified liquidity pressures in the banking system.

Future Outlook

• Monetary Policy Challenges: BB may need to further tighten credit limits and enhance supervisory capacity to manage inflation and financial sector risks.
• Fiscal Policy Concerns: The FY12 budget's expansionary nature and high subsidy burden may lead to further demand-side pressures if not managed carefully.
• Importance of Infrastructure and Energy: Improved infrastructure and energy supply are crucial for sustaining growth and reducing inflationary pressures.

Conclusion

Bangladesh's economy showed strong growth in FY11, but it faces significant risks from global economic slowdowns and domestic policy shortcomings. The government needs to strengthen fiscal and monetary discipline, address infrastructure and energy deficits, and improve the investment climate to sustain growth. The FY12 budget is ambitious but requires careful implementation to avoid exacerbating existing economic challenges.