After the World Bank did it last week, the International Monetary Fund (IMF) today (October 11, 2023) revised downward its growth forecast for the Bangladesh economy in the 2023-24 fiscal. The IMF lowered its projection to 6.0 percent from 6.5 percent. The World Bank last week projected its new growth figure for the Bangladesh economy in 2023-24 as 5.6 percent, down from its previous projection of 6.2 percent. IMF outlook worsens for a 'limping' world economy. Mideast war poses new uncertainty The IMF also said Bangladesh's economy grew 6 percent in the 2022-23 fiscal, in its flagship World Economic Outlook publication, released globally on Tuesday. The global lender revised upward its projections for Bangladesh's growth to 6 percent for the fiscal year 2022-23 from its previous forecast of 5.5 percent. IMF satisfied with BBS for efforts to meet conditions: Official
Bangladesh's State Minister for Foreign Affairs Md Shahriar Alam today (June 25, 2023) said, the narrative of Bangladesh being a “small country” has changed globally with its growing economy, wider engagement with partners, and political stability. “Bangladesh is seen as an example of good practice in multilateral forums,” he said while speaking at DCAB Talk. Diplomatic Correspondents Association, Bangladesh (DCAB) hosted its flagship event at the Foreign Service Academy. Also read: UN officials praise Bangladeshi peacekeepers during meeting with PM Hasina DCAB President Rezaul Karim Lotus moderated the discussion. DCAB General Secretary Emrul Kayesh also spoke on the occasion. The state minister said that Bangladesh’s importance has increased significantly and its level of cooperation internationally has also been enhanced. He said Bangladesh has achieved continuity and stability, and this continuity will prevail. Responding to a question, Alam said, the government is “not feeling any pressure” ahead of the national election as the Election Commission will proceed as per the constitution. Also read: Discrimination, sexual abuse have no place in Peacekeeping Missions, Dhaka says Referring to events over 10 years ago, the state minister said that there is no word like “fear” in the dictionary of Awami League and Prime Minister Sheikh Hasina. He also mentioned a diplomatic call for a fresh election before monsoon in the past, saying, “That sounds too ambitious.” The state minister said the government will not accept or welcome any interference in Bangladesh’s internal affairs but will welcome election observers. He said there has been conspiracy against Bangladesh in the past. Also read: Climate change: Foreign Minister highlights adaptation efforts Alam said Prime Minister Sheikh Hasina will not take any step that goes against the interest of the people and the country. Responding to a question, Alam said that there has been significant progress that leads to the need for withdrawing US sanctions on the elite force, RAB. "We will realise the demand (withdrawal of sanctions)." In his remarks, DCAB President Rezaul Karim said they understand Bangladesh has emerged as an important country in geopolitics with its growing economy. He said Bangladesh’s extraordinary development, democratic stability, and geopolitical significance are undeniably matters of discussion at home and abroad. Read more: UN officials praise Bangladeshi peacekeepers during meeting with PM Hasina
The proposed budget of Bangladesh in the fiscal year 2023-24 has set an estimated Gross Domestic Product (GPD) worth of 50.06 lakh crore with a 7.5 percent annual growth. The inflation target was set to 6 percent which is now 9.28 percent in the proposed budget. The 7.5 percent growth projection could be deemed as ambitious given the uncertainties in the global economy and various other challenges at home. Finance Minister AHM Mustafa Kamal explained his position on why he is expecting higher growth this time despite the economic pressures. Read more: Finance Minister unveils Tk 761,785 crore national budget “We expect to return to a higher growth trajectory and achieve a 7.5 percent GDP growth, by way of investing in the productive sectors and stimulating productivity and domestic demand,” he said. Kamal focused on investment in the 100 special economic zones and completing ongoing mega-projects to achieve the GDP target. In FY19, Bangladesh achieved a record 8.15 percent GDP growth. Then came the pandemic. The finance minister set a growth target of 8.2 percent in FY20, but the actual growth achieved was 3.45 percent, the lowest in several decades. The growth rate increased to 6.94 percent in FY21 after recovering from pandemic effects. The GDP growth further increased to 7.1 percent in FY22. Read more: Budget FY23-24: Focus should be on tackling macroeconomic challenges, says Dr Atiur Rahman
Prime Minister Sheikh Hasina on Wednesday (May 31, 2023) said that the government is making every effort to keep Bangladesh's economy alive despite the global economic recession caused by the Covid-19 pandemic and the Ukraine-Russia war. The prime minister said this while responding to a tabled question of Awami League MP elected from Chattogram MA Latif for PM’s question-answer session. She said the government has been able to quickly bring the country's economy to the pre-Covid high growth trend dealing with the recession, inflation and instability in the global economy caused by the pandemic and the war. Read more: President Erdogan and PM Hasina vow to take Dhaka-Ankara ties to new height “Amid the crisis over Covid, our growth in the financial year 2019-20 was 3.45 percent which was one of the highest in the world for that period,” she claimed. She said that due to the various steps taken by the government to boost the economy, the GDP growth in the financial year 2020-21 increased by 6.94 percent. “It further increased to 7.10 percent in FY 2021-22.” Hasina also highlighted various measures taken by the government to keep the economy of the government alive. Read more: PM calls for more Swedish investment as H&M boss calls on her These included government expenditure rationalisation, social protection, subsidies in electricity, energy and agriculture sectors, export incentives, rise in remittance inflow, monetary policy etc, she said. In response to the question of Jatiya Party MP elected from Dhaka Syed Abu Hossain, the prime minister highlighted the various steps taken by the government to control the prices of daily commodities and said as a result of the government's activities, it has been possible to control the prices of essentials and the poor people are benefiting from it. In response to the question of Jatiya Party MP elected from Pirojpur Rustam Ali Farazi, the she said that it will be possible to start rail traffic on the Dhaka-Mawa-Bhanga section of the Padma Bridge Rail Link Project by September 2023 and the Jessore section from June 2024. Read more: Work together to regain lost glory in science and technology: PM Hasina to Muslim community In response to reserved seat MP Kha Mamata Lovely's question, the prime minister said that 555,134 families have been rehabilitated through the Ashrayan project.
Prime Minister Sheikh Hasina on Sunday (May 28, 2023) said Bangladesh has been able to achieve remarkable socioeconomic development in the last 14 years due to a peaceful democratic environment prevailing in the country since 2008 elections. She gave the credit for the success to her party Awami League which formed the government in 2009 after winning the 2008 election. The prime minister was speaking at a programme celebrating the golden jubilee of the conferment of the Joliot-Curie Peace Medal to Father of the Nation Bangabandhu Sheikh Mujibur Rahman. Cabinet Division organised the programme at Bangabandhu International Conference Center (BICC) with the PM in the chair. Read more: US visa policy will apply to BNP leaders who are making open declaration to obstruct upcoming polls Hasina said after getting the people's mandate in 2008 her government has been working for the development of the country in a planned way. “As a result we have been able to reduce the poverty rate and maternal mortality, increase literacy and life expectancy,” she said. “So a peaceful sustainable environment is needed for the people to attain economic emancipation, and all have to remember that,” she said. Denouncing global arms race she put emphasis on settling all disputes through dialogue as Bangladesh did with India and Myanmar. “Why this arms race (going on) now, why will not the money that is being used for arms competition be used for hungry children and humans. For this arms competition thousands of children and women are leading inhuman lives around the globe,” she said. Read more: Bangladesh's upcoming national polls will be under AL govt: PM Hasina In this connection, she mentioned that Bangladesh has given shelter to more than one million forcibly displaced Myanmar nationals, Rohingyas, who faced oppression her 1971. In this regard she recalled the genocide Bengalis suffered in 1971. “We want that peace returns to the world. There shall be no types of unrest (in the world),” she said. PM Hasina said that those who did not want the Independence of the country had killed Father of the Nation Bangabandhu Sheikh Mujibur Rahman. “Every moment we have to overcome their (anti-Liberation forces) barriers,” she said. The prime minister firmly said Bangladesh does not want any unrest and confrontation in the world. Read more: How Bangladesh became a role model for dev: PM Hasina tells Qatar University students in Doha “We want development in people’s lives, and we always want that for every one” she said. She also announced introduction of ‘Bangabandhu Sheikh Mujib Peace Prize’ to recognise those who are working for establishing peace at home and abroad. “Because we want peace we will surely advance towards the path of peace,” she said. Eminent researcher Monayem Sarker delivered his keynote speech at the programme. Eminent novelist Anwara Syed Haq, former Dhaka University Vice-Chancellor Dr AAMS Arefin Siddique, former principal secretary and chief coordinator of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman Birth Centenary Celebration National Implementation Committee Kamal Abdul Naser Chowdhury took part in discussion on the keynote. Read more: Mirza Fakhrul, Rajshahi BNP leader sued for 'death threat against PM' President of Bangladesh Peace Council Mozaffar Hossain Paltu and Cabinet Secretary Md Mahbub Hossain also spoke. The PM also released a first day cover and commemorative stamp and unveiled a souvenir publication on this occasion. A documentary on Bangabandhu Sheikh Mujibur Rahman‘s JulioCurie Peace Prize award was screened at the programme. Later, the prime minister witnessed a colourful cultural programme organised by Bangladesh Shilpakala Academy. Bangabandhu Sheikh Mujibur Rahman, the founder of the Bengali nation-state and the architect of independence, the forerunner of democracy and peace movement, was awarded the JulioCurie Peace Prize by the World Peace Council on May 23, 1973. Read more: PM’s 2nd visit to Qatar in 3 months bears sign of Bangladesh's visible presence in int’l arena: Momen To commemorate the contributions of world-renowned scientists Marie Curie and Pierre Curie to the struggle for world peace, the World Peace Council introduced Joliot-Curie Peace Prize for distinguished individuals and organisations in 1950 for outstanding contribution to the fight against fascism, anti-imperialism, humanitarian welfare and peace. Among the award winners were World leaders like Fidel Castro, Ho Chi Minh, Yasser Arafat, Salvador Allende, Nelson Mandela, Indira Gandhi, Mother Teresa, poet and politician Pablo Neruda, Jawaharlal Nehru, Martin Luther King and Leonid Brezhnev.
Inflation, revenue shortfall, dollar crisis the major challenges for economy ahead of election-year budget
Preparations for Bangladesh's national budget for the 2023-24 fiscal must balance expectations in an election year with the conditions of the International Monetary Fund (IMF), and tackle inflation, foreign exchange crisis and revenue shortfall. Balancing public satisfaction and protecting the economy is a major issue. Economists say it has been seen in the past that election year budgets often prioritise public satisfaction over the improvement of the economy. As such, the opportunity to deliver a budget that is satisfactory is very limited, said macroeconomist and public policy analyst Dr Debapriya Bhattacharya, who is also a Distinguished Fellow at the Centre for Policy Dialogue (CPD). Read more: Safeguards are needed to protect vulnerable people under IMF-backed reforms: Debapriya He told UNB, "Before the election, all governments want to give a budget that satisfies the people. But due to the financial situation, fiscal deficit, and trade deficit, the opportunity is very limited for the government. If such a big effort is made, it will have a negative impact on the overall economy." "It is important to remember that this budget will be implemented by two governments. In this budget, flexibility must also be preserved. Because, if the government makes any big promises, there is doubt as to how much they can implement," he pointed out. Dr Debapriya said that the budget is coming at a time of political uncertainty in the country. Plus exit from LDC, and the Covid-19 response revival are issues hanging over the budget. Also read: 11pc of Bangladesh budget allocated for disaster risk reduction: State Minister “Compared to any other year, this year's budget has to be prepared in a very complicated situation. Because earlier, there would be a deficit in terms of income and expenditure in the country, but there would be comparative relief in terms of foreign transactions. But this time it is not,” he opined. Dr Debapriya said, "There has been a major disruption in the growth rate. It is going down further because there is no money, no dollar. There is a huge deficit in both areas to be dealt with together.” So the government has to control imports and limit its investment program. As a result, next year's growth target should also be moderated. Read more: Despite many challenges, Bangladesh remains one of the fastest growing economies in Asia-Pacific: Visiting IMF team "The financial structure has actually weakened," he said. Executive Director of the South Asian Network on Economic Modeling (SANEM) Salim Raihan, also a professor of economics at Dhaka University (DU), said that in the previous election years, the economy was not in such a crisis as this time. "As a result, no new major pressure was created in the economy despite budgeting for public satisfaction at that time. But this time, if the budget is made considering only public satisfaction in view of the election, it will create new pressure on the economy," Professor Raihan said. Read more: Bangladesh’s GDP growth rate will overtake China’s in current fiscal year, IMF predicts
The whole world is now facing economic stress, inflation, fuel price hikes and supply chain disruptions and Bangladesh is not an exception, State Minister for Planning Shamsul Alam said Sunday. "Facts and figures show that Bangladesh's economy is on the right track and there is no reason to panic," he added. Shamsul Alam was speaking at the seminar "Bi-annual Economic State and Future Outlook of Bangladesh Economy: Private Sector Perspective" organised by the Dhaka Chamber of Commerce and Industry (DCCI). Bangladesh's manufacturing sector saw a 23 percent growth in the last fiscal year, the state minister said. "Last year Bangladesh sent about one million workers abroad and its positive impact on remittance inflow will be visible soon. Also, the full automation of the taxation system will reduce harassment as well as boost revenue," he added. Read: Bachelet assures UN’s continued efforts to ensure safe Rohingyas to Myanmar Shafiul Islam Mohiuddin, member of parliament and also a former president of the Federation of Bangladesh Chambers of Commerce and Industries, said despite global economic volatility, Bangladesh's reserve is adequate to cover import bills for the next five and half months. "And the ongoing crisis is temporary." Bangladesh Bank Chief Economist Habibur Rahman said they always consider the best balancing of policy guidelines to control the money circulation in the market. "We are also thinking of options for currency swap with a few countries like India and China," he added. Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the government needs to adjust fuel prices quarterly in line with the global rates. DCCI President Rizwan Rahman suggested expediting bilateral and multilateral comprehensive economic partnership agreements with selective countries and revising the import tariff structure. He also called for ensuring a flexible interest rate regime to reduce inflationary pressure and stabilise forex reserves.
Commerce Minister Tipu Munshi has said Bangladesh is an agro-based economy so both businesses and government need to give emphasis on this sector including product diversification. Moreover, “we need to strengthen our SMEs for better expansion of our economy,” he said. Tipu Munshi came up with the remarks while addressing as the chief guest at the inaugural ceremony of the new extended office space of Dhaka Chamber of Commerce & Industry (DCCI) namely “DCCI Gulshan Centre” on Saturday. The Commerce Minister also emphasized to work more to do better in all business indices to be competitive in the international market. He said that the new extension of DCCI (DCCI Gulshan Centre) in the north side of the city is a reflection of its strength and he hoped that DCCI will be able to serve the business community more in the days to come. Read: Commodity prices to come down in line with global market rate: Tipu Munshi Jaim Uddin, president of Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) said Bangladesh still lags behind in the logistic sector, but it is necessary to prioritize the logistic sector to attract foreign direct investment (FDI). He said that removing traffic congestion in the Dhaka-Chittagong highway and ensuring faster services at the sea ports will help boost the economy.
Agriculture is the economic backbone of Bangladesh. But farmers say that numerous revolutionary reforms introduced in the sector over the past two decades have failed to bring any major change in their economic condition. The reason: The profiteering middlemen who buy fruits and vegetables at extremely low rates directly from farms, but jack up prices in further sales -- from distribution to retailing through commission agents and wholesalers. Read: UK announces £18m new funding to end child marriage in Bangladesh, 11 other countries And as this nexus takes a substantial chunk of profit from their produce, farmers are left with very little revenue in the agricultural market hierarchy in the country. Of course, consumers are also a casualty as they pay a higher value for the cheaper farm produce. Market analysts also blame the nexus of multi-layered middlemen involved in the distribution process for the huge gap in the prices of agricultural produce at farm and retail levels. Another reason being the high transportation cost to cities like Dhaka. In fact, vegetable prices are 100-300% higher in the kitchen markets of the capital than that at the farm level, according to the Department of Agricultural Marketing (DAM). This has already been admitted by the Bangladesh government. Agriculture Minister Dr Abdur Razzak had earlier said that "many people cannot afford sufficient vegetable intake due to high prices while the farmers are also not getting fair prices of their produce". Read: Remotest region to connect with broadband internet by 2025: Palak Farmers often throw away their vegetables when they find that the cost of production is higher than that of sales, according to the government. "We have to create a modern marketing system to eliminate this problem," he had said, adding "value-addition and market chain development are needed for this".
Bangladesh urgently needs to go for a fresh round of reforms to strengthen the private sector to tap its economic potentials and accelerate the export-led growth, said a report on Wednesday. The report titled ‘Bangladesh Country Private Sector Diagnostic (CPSD), prepared by IFC and the World Bank, also said Bangladesh’s post–Covid recovery will force a reimagining of its developmental model, highlighting the importance of the private sector and making the reform agenda even more urgent. Taking part in the virtual report-launching event, experts said Bangladesh has the potential of becoming an economy of $800 billion by 2030 from the current $300-billion one if proper steps are taken to diversify its export basket and ensure the ease of doing business through necessary reforms. Launching the report, Prime Minister's Private Industry and Investment Affairs Adviser Salman F Rahman said the diversification of export is very important, though the country has been facing challenges in this regard. “Our dependence on the RMG has been highlighted for a long time that we need to diversify our exports …diversification should be our priority now.” He said the RMG sector has got tremendous support from the government for its expansion, but similar support has not been given to other areas, and this is something the government is now seriously looking at. “What we really need to do is to identify the reasons for which the garment sector has been so successful and we can apply the same principles to the other sectors.” Also read: Covid-19 affected 60 million-plus domestic workers in informal economy: ILO Salman said protectionism for the domestic industry is necessary since the country is going to graduate to a middle-income one. “The pharmaceutical industry which has been identified as a real growth sector since it has got that protectionism. “Bangladesh had a positive GDP growth rate last year despite the adverse impact of the Covid-19 pandemic and it was the only country in South Asia which did not experience a recession. We’ve prepared the Eighth Five Year Plan keeping all the challenges of the pandemic in mind,” he said. The PM’s adviser said the CPSD recommendations are well aligned with the priorities of the government’s Eighth Five Year plan for setting a trajectory towards a prosperous Bangladesh by 2041. As the country is aspiring to achieve double-digit growth, Salman said, the government has taken various steps, including developing the infrastructure, increasing foreign direct investment and creating an investment-friendly climate. He said the economic zones and mega connectivity projects like Matarbari Port and Padma Bridge that are now under construction will be the gamechangers in the coming years. He said the agro-processing industry is making good progress and it will be another gamechanger for Bangladesh. Also read: Govt. goes for more consumption and investment to recover economy from pandemic loss Mamun Rashid, Managing Partner, PricewaterhouseCoopers Bangladesh Private Limited, said the report has focused on the private sector capacity building as well as the government’s capacity building. “When we’re talking about reforms and strengthening capacity building, I try to draw your attention towards the capacity building of our private sector, efficiency improvement of our private sector as well as improving the overall balance sheet of the private sector,” he said. IFC’s Vice President (Asia and Pacific), Alfonso Garcia Mora said the need for reforms will become even more compelling for Bangladesh to overcome the fallouts of the Covid-19 pandemic. “Finding new sources of income and growth will be an urgent priority.” He also said the private sector, which already accounts for more than 70 percent of all investment in Bangladesh, supported by a strong financial sector, will need to play an important role in spurring the recovery so the country can grow, export and create quality jobs. IFC Country Manager Wendy Werner said it is clear the private sector has an important role to play to meet the rising demand for quality healthcare and improving the efficiency of delivering health services, as health financing in the country is low compared to others at a similar level of development. “Bangladesh could also target high-end markets and introduce new technology in the readymade garment sector, and seize opportunities in footwear, leather electrical goods, and agribusiness exports,” she observed. Also read: Budget document: Preparations under way to face the challenges of developing economy World Bank’s Country Director Mercy Tembon said readymade garments have contributed significantly to Bangladesh’s economic growth. “For a more resilient, inclusive and sustainable growth, Bangladesh will need to diversify its export basket and develop a robust and sophisticated private sector, relevant in the post–Covid recovery phase when public resources will be needed most in the social sectors.” The report says key priority areas for the reform agenda include creating a favourable trade and investment environment for domestic and foreign investors, modernising and expanding the financial sector and removing impediments for developing infrastructure. “Transport and logistics, energy, financial services, light manufacturing, agribusiness, healthcare and pharmaceuticals sectors are among those with the strongest potential for private investment that could play a significant role in boosting economic growth,” the report observes.